Singapore and Bangalore-based online microlending platform Milaap has joined hands with a Singapore-based media organisation e27 to launch an entrepreneurship development fund. The crowdsourced fund, targeting a corpus size of S$ 50,000 or $40,000 (Rs 22 lakh), will give out loans to entrepreneurs based in small towns across India.
However, such funding will be disbursed as a loan and not as a donation, and the lenders’ contribution would be returned after two years.
At the time of posting this report, Milaap has raised around a third of the targeted corpus, led by its super angels including Mohan Belani (director at e27 and co-founder of Singapore-based mobile social gaming startup Mobret), among others. Other super angels involved with Milaap include Jayesh Parekh (co-founder of Sony Entertainment Television) and Harveen Narulla (Singapore-based entrepreneur who has co-founded GreenPost, a startup engaged in paperless electronic bills aggregation).
Through this latest initiative, e27 and Milaap seek to back entrepreneurs who lack an efficient support system, such as bank lending, while running small businesses like making hand-crafted items, tailoring and more.
Milaap is a microlending organisation that does fundraising from people and disburses those funds as loans to businesses in India. These loans are fully repaid to the lenders over a period of 12-24 months. However, lenders only get back the principle. Milaap charges an interest rate which is just half of what borrowers would have to pay to a bank and this goes to cover the cost operations for Milaap.
Founded in June 2010, Milaap was co-founded by Sourabh Sharma and Anoj Viswanathan (both graduates from the National University of Singapore), along with Mayukh Choudhury, a post-graduate from IIM-Lucknow. As of November 2011, Milaap had raised $160,000 for borrowers in Karnataka, Tamil Nadu, West Bengal and Maharashtra, with 100 per cent repayment rate, the company said.
This is the second India-specific crowdfunding initiative launched this month. Two weeks ago, San Francisco-headquartered crowdfunding microlender Kiva launched its first service in India. Leveraging the internet and a worldwide network of microfinance institutions, Kiva lends as little as $25 to individuals. In India, the lender is expected to reach out to ‘the underserved and the vulnerable group’ through three field partners located in Orissa and Manipur.
(Edited by Sanghamitra Mandal)