MicroGraam is a peer-to-peer lending platform that enables rural entrepreneurs to access loans from socially minded investors. It aims to provide affordable, micro-loans to rural Indians who would not otherwise have access to financial services.
Founders: Rangan Vardan, Sekhar Sarukkai
Funding: Raised Rs 25 lakh ($37,000) last September from Artha Platform as a cash award in a business plan contest. Earlier raised Rs 2 crore from US-based angel investor P Balasubramanian.
How it works: Under the MicroGraam model, the micro venture capitalist provides upfront funding to the micro-entrepreneur to build a small business. The two parties share in profits or losses for a pre-determined number of years. Nearly 90 per cent of its borrowers are women from low income backgrounds. It works with local NGOs to provide training and additional services to support borrowers and help develop successful businesses. It decreases the perceived risk that investors might assume when investing in low income borrowers by providing a financial return and risk mitigation in the form of a principal guarantee.
MicroGraam is a finalist at the Sankalp Awards 2014.
StartupCentral is a digital media partner for Sankalp Unconvention Summit 2014