时间：2022-08-28 10:47:53
It’s an MFI. It’s an NGO. No, it’s Micrograam. It enables poor villagers to get credit, but it is not a microfinance institution. It works closely with non-governmental organisations but is, in fact, a private company. Micrograam, set up in February 2010 by Rangan Varadan, a former head of banking and capital market verticals at Infosys, has devised an innovative means of extending credit to the poor by creating a portal that brings investors and borrowers together, allowing them to work out their own deals.
Micrograam’s initiative has been a hit: in just 16 months it has found 270 investors and helped disburse loans of around `87 lakh to 563 borrowers. The timing has helped too, since the microcredit sector is currently in crisis, and loans for the poor have dried up. Banks were always chary of providing such loans – and remain so. Says Peter Rex Charly of New Life, a Tamil Nadu based NGO which, among other services, helps villagers secure loans up to a maximum of `15,000 to set up self-sustaining busi- nesses: “Banks want references from us but they will not bear even our operating costs. And if any borrower defaults, we are blamed.” New Life has since given up on banks and works entirely through Micrograam.
More importantly, MFIs are in a bind and have drastically curtailed their lending. Following a spate of suicides by farmers in Andhra Pradesh last year, some of which were attributed to their harassment by MFIs – excessively high interest rates, strong arm methods of debt collection – the state government in October 2010 passed a stringent law regulating MFI activities. The Reserve Bank of India too followed suit by setting up a commit- tee under senior official Y.H. Malegam to scrutinise MFI functioning; the committee’s recommendations, made in January this year – which broadly follow the stipulations of the Andhra Pradesh law – have been accepted.
Into this bleak landscape stepped Varadan and his colleague Sekhar Sarukkai, a serial entrepreneur formerly based in Silicon Valley. “It was the unsustainable relationship between the institutions and the customers that led to the current crisis,” says Varadan. His alternative? Seek funds not from banks but from well placed professionals and high net worth individuals or HNIs, who care about inclusive growth. Unlike banks, such people can be flexible with interest rates, as well as the loan periods. Simultaneously, avoid the expenses MFIs incur on setting up offices, engaging business development and collection agents – due to which they are compelled to charge high interest rates – and instead use NGOs working among the poor to zero in on potential borrowers.
Restricting its activities to Tamil Nadu and Karnataka, the Bangalore-based Micrograam has so far roped in 33 NGOs which identify borrowers. It puts up a list of prospective borrowers on its portal, along with each one’s profile, the amount he needs and the maximum interest he can afford. Potential investors in turn –Varadan and Sarukkai already have employees of Infosys, ITC, TVS and Nagarjuna Constructions checking their portal – put up the minimum interest rates they are prepared to offer. The bargaining then begins; the time taken to conclude the deal usually depending on how long the borrower can hold out for the lowest bid.
Most deals at Micrograam are sealed at annual interest rates of 15 to 18 per cent. (In comparison, the Andhra Pradesh law caps the interest MFIs can charge at 24 per cent, which shows many were charging even more.) Of the interest paid, Micrograam keeps 1.5 per cent, the NGO involved gets six to seven per cent, while the rest goes to the investor. Not only the selection of beneficiaries, but also the disbursal of loans as well as the collection of repayment instalments, is entirely the NGOs’ responsibility, not Micrograam’s.
Some of the better known NGOs Micrograam has tied up with include Karnataka’s AHIMSA, or the Association for Human Integrated Massive Social Action, which helps farmers choose the right crops to grow. Micrograam’s initiative now helps these farmers buy the seeds and other inputs they need for these crops. There is also Junglescapes, based in Karnataka’s Bandipur district, which identified two village entrepreneurs who now make smokeless chulhas thanks to the loan Micrograam helped them get.
If the loan is taken for a service the NGO itself provides, it does not take a commission, bringing down the interest rate drastically. Perhaps the biggest NGOMicrograam is working with is Vidya Poshak, which has centres in 18 Karnataka districts and conducts three-month courses to equip graduate youth from among the poor with the skills to take up backoffice jobs. Its students have been placed in jobs with Infosys, Tata Consultancy Services, Wipro and other such firms. The course costs `15,000 which few poor families can afford. But now, in conjunction with Micrograam, Vidya Poshak has been arranging loans for the students at a mere eight per cent interest. Says N. Venkatesh, Vice President at Vidya Poshak, “Loans from Micrograam are easy and can be repaid by students after they get a job. Demand for the course has shot up.”
Given the upheaval in the MFI sector, Micrograam, too, has come under RBI scrutiny. But Varadan says he has been able to convince the officials of his good intentions. “People from RBI have visited us twice,” he says. “We convinced them ours was a transparent lending model.”
Again, there are several obvious risks associated with the Micrograam model. For one, dubious NGOs abound. Varadan says he is extremely careful while choosing NGOs to work with. He is just as careful in keeping track of funds. “All disbursals are from bank account, by cheque so that the fund flow can always be traced,” he says.
Is the likelihood of default by poor borrowers another risk? Varadan says Micrograam’s repayment record since last September has been a staggering 98.2 per cent – hardly anyone has defaulted. What if he does not find enough investors? Varadan dismisses the possibility “We do not want charity. We are looking for individuals who believe in social lending, not charity,” he says. Around 80 per cent of his investors so far have been wealthy individuals rather than company employees, but Varadan is not fazed. The fact that Micrograam is not yet profitable does not worry him either. “Once we gather scale, we will sustain,” he says. “This is how this model is meant to be.” He has extremely ambitious targets. “We intend to get 16,000 investors and help disburse loans of `25 crore in the next two years,” he says.
Despite various measures for financial inclusion by the Centre and the RBI, about 40 per cent of rural households do not have deposit accounts. Most of them still depend on MFIs and informal sources like money lenders for their credit needs. With the MFI sector in a state of flux, newer models like those of Micrograam may be one of the ways to go.