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MicroGraam allows underprivileged entrepreneurs, students, and farmers in India to get loans from urban professionals, who are able to offer much more flexible loan terms than conventional microfinance models by crowdsourcing to raise funds for borrowers. On MicroGraam’s website, lenders can easily choose a borrower, the interest rate, and make an investment. Then, in 12-18 months, the borrowers pay back the loan to the investor, who can then choose to lend again or keep their investment. To ensure that money is going to the right places, MicroGraam works with 23 NGOs in rural areas to identify deserving and credit-worthy borrowers, who need loans for productive purposes, such as education, farming or entrepreneurship. Rethinking Poverty: Dr. Varadan and Dr.Sarukkai’s idea was to treat borrowers as equal partners in the lending process. Loans were designed to cater to the cash flow needs of rural borrowers. For example, for farming loans, there is no repayment required during the first three months. In addition, MicroGraam has set up an interest rate negotiation process with complete transparency on all elements of the loan term: the amount, duration, intermediary fees, interest rate earned by the lender, and the total interest rate paid by the borrower. Dr. Sarukkai says, “Think of MicroGraam as the ‘eBay’ of microfinance. MicroGraam shifts the power away from investors who could traditionally demand any interest, and towards an open marketplace with a balanced representation from all parties involved in the microfinancing ecosystem.” MicroGraam’s success stories speak for themselves. Anurada is from Uttar Kannada district, where her family of 6 lived off of a yearly income of Rs 14,000. She used her MicroGraam loans to complete an employability training program and as a result was hired by First American Financial Corporation. She now earns Rs 13,000 per month and has paid off her loans. Nagamma lives in a small village near Koppal, Karnataka. She was a house wife and wanted to contribute toward the family expenses and savings. She started a vermicompostbusiness but was unable to expand to a scale since local banks would not give her a loan. After receiving a loan of Rs 5000 through MicroGraam, she doubled her income within six months from Rs 1500 to Rs 4000 per month.She now has completely repaid her loan to MicroGraam and plans to invest her income towards her children’s education. invest at micrograam.COM
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