Wednesday, March 03, 2010

RangDe Micro finance: fuelling rural entrepreneurship

I had heard of RangDe long back and had signed up at their website, but had never cared to invest. RangDe is a micro finance facilitator who cater to business needs to villagers aiming to start their own business. RangDe identifies villagers who are looking to start their own small businesses- a vegetable shop or a saree business or a kirana shop or a sweets & snacks business and so on and help them with seed funding. These village entrepreneurs will only be needing a reasonably small amounts-from Rs 5000-15000 to start their small business and traditional financial institutions like Banks will not entertain them-either because the amount is too small for any profitable lending business or these people have no collateral to offer. rangde-logo-beta
Traditionally these villagers approach local money lender who would give unsecured credit, but at an abnormally high interest rate ranging between 30% to 50%, with interest amount deducted right away from the principal even before it is handed over to the borrower. Such a high interest rate meant borrowing from them and building a profitable business is a steep uphill drive.

While I’d an account in RangDe, I’d not bothered to invest so far as I thought recovery rates are very low (I knew of Bank Managers complaining how difficult it is to recover a loan given to a farmer/villager, who would take Bank’s money for granted and seldom care to repay) I met RangDe founders, Ram and Smita at Cerebrate 2010 and got to know a better insight of Micro credit concept. I was surprised to learn that RangDe has a recovery rate of 98.5% which is remarkable (it dipped from 99% due to natural calamities in some areas)

RangDe apparently doesn’t lend money to individuals. People seeking funding from RangDe are required to find a partner/form a group and then approach for investment. This way the risk is spread and there’s more responsibility/checks in place. RangDe has partners who work on ground with these villagers seeking funding and they are evaluated and constantly mentored during the course of their business.

If you care to help society, fuel entrepreneurship and assist villagers in becoming financially independent and eradicate poverty, pls try to invest a small amount in Micro finance facilitators like RangDe. The risks are minimal, return is almost at par with Saving Bank account but the satisfaction of contributing our bit to a good cause is priceless.

Compared to traditional micro creditors who give unsecured loans at 30-50%, RangDe charges only 8.5% p.a from its borrowers. Of this RangDe gets 1.5%, investor gets 2% and RangDe partners who work with villagers get 5% Most of the loans are given for a duration of one year. Refer for more details as to how they operate and where you can invest.
Ram-smita-rangdeInspired by them, I’ve invested Rs 10000 in RangDe.Read more about it here

Ram and Smita were also featured on CNBC youg turks program that was telecasted yesterday. RangDe is inspired by Nobel prize winner Mohammed Yunus. The cause they stood for, quitting high paying software jobs and taking this full time and the number of lives they’ve changed so far deserves an applause.

Similar: My early investment experiences * Cerebrate 2010 * Made a unique social investment * Status update on my Rangde investment after 6 months *

Jan 2011 update: My investments in Borrowers from AP had to be written off due to recent developments there...


Anonymous said...

very informative.
Thanks for sharing this

Shrinidhi Hande said...

You're welcome

Siddharth Bargate said...

,GiveIndia is a NGO that raises funds for the poorest of the poor in India by helping you donate money to 200+ trust worthly charities.All eNGOs on GiveIndia have been screened for transperency and credibility.We send you feedback for your donation to there Indian Charities.
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Skumar said...

We Care India is another platform ( similar to Milaap and Rangde) that recently launched and operates at grassroots bypassing a field partner. Check it out at also their blog at

Shrinidhi Hande said...

Thanks for sharing the info Sidhartha and Skumar