Rang De
Encyclopedia
Rang De is a non-profit organisation that allows India
ns to lend money to fellow Indians that require a small amount of money (microloans
) to start or grow a business. Money can be lent in the form of a social investment through Rang De's on line portal RangDe.Org. Rang De disburses loans to its borrowers through its field partners (usually NGOs
) across India
. Social investments will be repaid with interest at the end of a loan tenure (typically one or two years).
Rang De is an attempt to bring together the India that is rapidly progressing economically and the India that has been left out and needs attention and is conveyed in its tag line "share the colours of joy". Rang De’s mission is to make microcredit accessible to every low income household by lowering loan interest rates through innovative means.. The USP of Rang De is that it offers loans at 8.5% flat which is one of the lowest in the microfinance world.
. As there was no on line micro-lending platform in India at the time, they chose to go on with Rang De with the main objective being to create a model that could be replicated and launched at a national level.
One of their first decisions was registering the domain name. Following that, they found Niyati Technologies as their creative partner came as a blessing. Niyati Technologies gave them a discount of 50 per cent as they were working on a non-profit cause.
The founders came to the Microfinance India Summit in October 2007. They got offers of equity from some of the participants at the conference and investors started showing interest.
The ICICI Foundation for inclusive growth through CSO partners have agreed to incubate Rang De in early 2008. CSO Partners is a non-profit organization that is committed to strengthening civil society organizations by mobilizing contributions -both human and financial - and providing appropriate support services through a large network of ‘partners’ specialized in the area of donor service, social investment services, financial management, governance, technology, advocacy and communications.
Rang De looks to sustain itself by charging its borrowers a nominal fee of 1% on all transactions. This is to help Rang De become sustainable and cover costs such as the payment gateway fees and server charges. 0.5% is kept aside as a contingency fund to partially cover loans defaulted due to genuine reasons.
Borrower applications are processed by the team and put on line on Rang De's portal RangDe.Org. Rang De raises investments through RangDe.Org and ensures that loans are disbursed within 30 days of the receipt of application.
Through RangDe.Org users can search for a borrower they want to lend money to (make a social investment towards). Borrowers can be found by state or by the activity for which they need a loan for. Alternatively, if the user does not have time to select a borrower or wants to help fulfill the most urgent loan requirement, they can make a quick investment. Social investments can be made in multiples of Rs. 100.
During the investment process, social investors can chose to support Rang De by donating money or by contributing the interest earned on their social investment to Rang De.
Rang De disburses loans to the borrowers through its field partners. When social investments do not fulfill a loan requirement, Rang De gives the remaining amount from its corpus fund. All of the social investors that contributed to a loan are informed of disbursals of loans towards which they contributed to. The social investor will be informed of the first disbursal and this will act as a receipt of the social investment.
Borrowers repay loans on a periodically (weekly, monthly or quarterly) basis. Social investors will be informed when the first repayment is made on their behalf. They can view the remaining repayments being made on their behalf on their Rang De profile. The repayments being made to the social investor is known as Rang De credit. Social investors can chose to invest their Rang De credit towards a borrower in need or they can withdraw it.
Once the loan tenure is over, the social investor will have gotten their full loan amount back along with a 3.5% APY
interest on the same (provided that the borrower doesn't default on the loan). The interested is calculated from the day the loan is disbursed.
The breakup of the 8.5% interest on any income-generation loan is as follows:
Rang De has observed people going to moneylenders in the beginning of an academic year and has implemented an education loan program to help those who face the same crunch.
The System works as follows:
Rang De has gotten a two month credit period from schools as Rang De needs time to raise funds for all the borrowers.
Pictures of children are deliberately not uploaded on RangDe.Org due to privacy issues. Rang De has a signed consent from the parents for their photographs to be put up on the site.
Field partners have methods in place to take adequate care to check the credentials of the borrowers as well as their children. Only children who have done well in their previous academic year will be considered for this loan.
Since education is not an income generation activity, Rang De social investors do not get a return on investment. However, the principal will be returned during the loan tenure. Field partners would get 4% flat towards their operational cost and Rang De would charge 1% to cover its transaction costs.
The system works as follows:
Rang De's field mentorship program is presently in its pilot stage. New Life, Rang De's field partner in Tiruchirapalli
, Tamil Nadu
has identified three borrowers for the same.
Anybody can join a Rang De Chapter provided they are residents of the city the Rang De Chapter is in.
If there is no Rang De Chapter in a particular city and somebody would like to create one, they can follow the instructions on the Rang De Chapter Portal.
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
ns to lend money to fellow Indians that require a small amount of money (microloans
Microcredit
Microcredit is the extension of very small loans to those in poverty designed to spur entrepreneurship. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit...
) to start or grow a business. Money can be lent in the form of a social investment through Rang De's on line portal RangDe.Org. Rang De disburses loans to its borrowers through its field partners (usually NGOs
Non-governmental organization
A non-governmental organization is a legally constituted organization created by natural or legal persons that operates independently from any government. The term originated from the United Nations , and is normally used to refer to organizations that do not form part of the government and are...
) across India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
. Social investments will be repaid with interest at the end of a loan tenure (typically one or two years).
Rang De is an attempt to bring together the India that is rapidly progressing economically and the India that has been left out and needs attention and is conveyed in its tag line "share the colours of joy". Rang De’s mission is to make microcredit accessible to every low income household by lowering loan interest rates through innovative means.. The USP of Rang De is that it offers loans at 8.5% flat which is one of the lowest in the microfinance world.
Origins of Rang De
The idea of Rang De was formulated in December 2006 while the founders Ramakrishna NK and Smita Ram were working in the United Kingdom. They wanted to do something social in India in fields such as child labor, special children and farmer crisis. They realized that the root cause of many problems in India was poverty. As there was no on line micro-lending platform in India at the time, they chose to go on with Rang De with the main objective being to create a model that could be replicated and launched at a national level.
One of their first decisions was registering the domain name. Following that, they found Niyati Technologies as their creative partner came as a blessing. Niyati Technologies gave them a discount of 50 per cent as they were working on a non-profit cause.
The founders came to the Microfinance India Summit in October 2007. They got offers of equity from some of the participants at the conference and investors started showing interest.
The ICICI Foundation for inclusive growth through CSO partners have agreed to incubate Rang De in early 2008. CSO Partners is a non-profit organization that is committed to strengthening civil society organizations by mobilizing contributions -both human and financial - and providing appropriate support services through a large network of ‘partners’ specialized in the area of donor service, social investment services, financial management, governance, technology, advocacy and communications.
Funding and Revenue Model
Rang De is funded by CSO (Civil Society Organizations) Partners initiative, who is primarily working towards building a vibrant society.Rang De looks to sustain itself by charging its borrowers a nominal fee of 1% on all transactions. This is to help Rang De become sustainable and cover costs such as the payment gateway fees and server charges. 0.5% is kept aside as a contingency fund to partially cover loans defaulted due to genuine reasons.
The loan process
Rang De receives loan applications from borrowers through its field partners.Borrower applications are processed by the team and put on line on Rang De's portal RangDe.Org. Rang De raises investments through RangDe.Org and ensures that loans are disbursed within 30 days of the receipt of application.
Through RangDe.Org users can search for a borrower they want to lend money to (make a social investment towards). Borrowers can be found by state or by the activity for which they need a loan for. Alternatively, if the user does not have time to select a borrower or wants to help fulfill the most urgent loan requirement, they can make a quick investment. Social investments can be made in multiples of Rs. 100.
During the investment process, social investors can chose to support Rang De by donating money or by contributing the interest earned on their social investment to Rang De.
Rang De disburses loans to the borrowers through its field partners. When social investments do not fulfill a loan requirement, Rang De gives the remaining amount from its corpus fund. All of the social investors that contributed to a loan are informed of disbursals of loans towards which they contributed to. The social investor will be informed of the first disbursal and this will act as a receipt of the social investment.
Borrowers repay loans on a periodically (weekly, monthly or quarterly) basis. Social investors will be informed when the first repayment is made on their behalf. They can view the remaining repayments being made on their behalf on their Rang De profile. The repayments being made to the social investor is known as Rang De credit. Social investors can chose to invest their Rang De credit towards a borrower in need or they can withdraw it.
Once the loan tenure is over, the social investor will have gotten their full loan amount back along with a 3.5% APY
Äpy
Äpy is a traditional and the oldest Finnish humour magazine published related to the Walpurgis Night festivities. Äpy is published by the students of Helsinki University of Technology....
interest on the same (provided that the borrower doesn't default on the loan). The interested is calculated from the day the loan is disbursed.
Rang De Microcredit
Rang De Microcredit is a low cost, easy to access and borrower friendly credit meant for low income households. It is designed to match the business needs of these groups with the ability of individuals (social investors) to lend small sums of money and make a social impact. Rang De ensures that any income generation loan has an interest rate of no higher than 8.50% flat p.a.The breakup of the 8.5% interest on any income-generation loan is as follows:
- 5% goes to the field partner
- 2% goes to the social investor as a nominal financial return along with their phenomenal social return.
- 1% goes to Rang De to cover its operations.
- 0.5% goes to a contingency fund that is maintained by Rang De to repay social investors in case a borrower dies or defaults on a loan.
Rang De Education
Rang De Education loans have been designed to address educational needs of low income groups. Rang De's current initiative aims to fund the financial requirement at beginning of the academic year.Rang De has observed people going to moneylenders in the beginning of an academic year and has implemented an education loan program to help those who face the same crunch.
The System works as follows:
- Parents provide Rang De with the loan amount.
- Rang De provides them education vouchers.
- Vouchers are to be presented at the school to gain admission for the child at the school.
Rang De has gotten a two month credit period from schools as Rang De needs time to raise funds for all the borrowers.
Pictures of children are deliberately not uploaded on RangDe.Org due to privacy issues. Rang De has a signed consent from the parents for their photographs to be put up on the site.
Field partners have methods in place to take adequate care to check the credentials of the borrowers as well as their children. Only children who have done well in their previous academic year will be considered for this loan.
Since education is not an income generation activity, Rang De social investors do not get a return on investment. However, the principal will be returned during the loan tenure. Field partners would get 4% flat towards their operational cost and Rang De would charge 1% to cover its transaction costs.
Field Mentor ship program
Rang De's field mentor ship program aims to identify borrowers that are doing well, finance their expansion plans and get them mentored by experts in areas that the borrowers would need help in. This allows borrowers who have the risk appetite and the entrepreneurial ability to scale up their businesses.The system works as follows:
- The borrowers need time to come up with the expected loan amount figures
- Rang De's Field Partner sends in the detailed reports of the 3 candidates. These reports included the cash flows, credit sale details, business environment details and a summary report by the field mentor.
- Details will be fed into the system at Rang De which would help obtain a mentor for the business. The mentor would be some one with work experience in areas such as marketing, operations etc.
- The mentor would communicate to the borrower assigned to them through Rang De's field partner.
Rang De's field mentorship program is presently in its pilot stage. New Life, Rang De's field partner in Tiruchirapalli
Tiruchirapalli
Tiruchirappalli ) , also called Tiruchi or Trichy , is a city in the Indian state of Tamil Nadu and the administrative headquarters of Tiruchirappalli District. It is the fourth largest municipal corporation in Tamil Nadu and also the fourth largest urban agglomeration in the state...
, Tamil Nadu
Tamil Nadu
Tamil Nadu is one of the 28 states of India. Its capital and largest city is Chennai. Tamil Nadu lies in the southernmost part of the Indian Peninsula and is bordered by the union territory of Pondicherry, and the states of Kerala, Karnataka, and Andhra Pradesh...
has identified three borrowers for the same.
Rang De's Field Partners
| Name Of Field Partner | Location | State | Founded on |
|---|---|---|---|
| CBMD | Nagpur Nagpur Nāgpur is a city and winter capital of the state of Maharashtra, the largest city in central India and third largest city in Maharashtra after Mumbai and Pune... |
Maharashtra Maharashtra Maharashtra is a state located in India. It is the second most populous after Uttar Pradesh and third largest state by area in India... |
2006 |
| Samagra Gram Vikas Sanstha (Sagras) | Pusad, Yavatmal Yavatmal Yavatmal is a city and municipal council of the Yavatmal district in the Indian state of Maharashtra. The name derives from the Marathi Yavat and mal .-Demographics:yavatmal ,district in Amravati administrative division.... |
Maharashtra Maharashtra Maharashtra is a state located in India. It is the second most populous after Uttar Pradesh and third largest state by area in India... |
1988 |
| Association for Sustainable Community Development(ASSCOD) | Thiruvannamalai | Tamil Nadu Tamil Nadu Tamil Nadu is one of the 28 states of India. Its capital and largest city is Chennai. Tamil Nadu lies in the southernmost part of the Indian Peninsula and is bordered by the union territory of Pondicherry, and the states of Kerala, Karnataka, and Andhra Pradesh... |
1994 |
| New Life | Tiruchirapalli Tiruchirapalli Tiruchirappalli ) , also called Tiruchi or Trichy , is a city in the Indian state of Tamil Nadu and the administrative headquarters of Tiruchirappalli District. It is the fourth largest municipal corporation in Tamil Nadu and also the fourth largest urban agglomeration in the state... |
Tamil Nadu Tamil Nadu Tamil Nadu is one of the 28 states of India. Its capital and largest city is Chennai. Tamil Nadu lies in the southernmost part of the Indian Peninsula and is bordered by the union territory of Pondicherry, and the states of Kerala, Karnataka, and Andhra Pradesh... |
1993 |
| Hope IRDS | Kurnool Kurnool Kurnool is located at . It has an average elevation of 273 metres .Kurnool lies on the banks of the Tungabhadra River. The Handry and Neeva rivers also flow through the city. The K.C... |
Andhra Pradesh Andhra Pradesh Andhra Pradesh , is one of the 28 states of India, situated on the southeastern coast of India. It is India's fourth largest state by area and fifth largest by population. Its capital and largest city by population is Hyderabad.The total GDP of Andhra Pradesh is $100 billion and is ranked third... |
|
| Hope Foundation | Palakkad Palakkad Palakkad , formerly known as Palghat, is a municipality and a town in the state of Kerala in southern India, spread over an area of 26.60 km2.The city is situated about north of state capital Thiruvananthapuram. It is the administrative headquarters of Palakkad District... |
Kerala Kerala or Keralam is an Indian state located on the Malabar coast of south-west India. It was created on 1 November 1956 by the States Reorganisation Act by combining various Malayalam speaking regions.... |
|
| Pragati | Puri Puri Puri is district headquarter, a city situated about south of state capital Bhubaneswar, on the eastern coast of the Bay of Bengal in the Indian state of Orissa. It is also known as Jagannath Puri after the Jagannath Temple . It is a holy city of the Hindus as a part of the Char Dham pilgrimages... |
Orissa Orissa Orissa , officially Odisha since Nov 2011, is a state of India, located on the east coast of India, by the Bay of Bengal. It is the modern name of the ancient nation of Kalinga, which was invaded by the Maurya Emperor Ashoka in 261 BC. The modern state of Orissa was established on 1 April... |
1989 |
| Gram Utthan | Kendrapara Kendrapara Kendrapara is a city and a municipality in Kendrapara district in the Indian state of Orissa. It is the headquarters of Kendrapara district.-Geography:Kendrapara is located at . It has an average elevation of... |
Orissa Orissa Orissa , officially Odisha since Nov 2011, is a state of India, located on the east coast of India, by the Bay of Bengal. It is the modern name of the ancient nation of Kalinga, which was invaded by the Maurya Emperor Ashoka in 261 BC. The modern state of Orissa was established on 1 April... |
1990 |
| Karuna Trust | BR Hills | Karnataka Karnataka Karnataka , the land of the Kannadigas, is a state in South West India. It was created on 1 November 1956, with the passing of the States Reorganisation Act and this day is annually celebrated as Karnataka Rajyotsava... |
1986 |
| Grameena Mahila Vividodesha Soudharada Sahahari Niyamit(GMASS) | Bidar Bidar Bidar is a city in the Indian state of Karnataka. Located on the Deccan Plateau in the north-eastern part of Karnataka. It is the headquarters of the Bidar District.... |
Karnataka Karnataka Karnataka , the land of the Kannadigas, is a state in South West India. It was created on 1 November 1956, with the passing of the States Reorganisation Act and this day is annually celebrated as Karnataka Rajyotsava... |
1994 |
| Udyogini | Bikaner | Rajasthan Rajasthan Rājasthān the land of Rajasthanis, , is the largest state of the Republic of India by area. It is located in the northwest of India. It encompasses most of the area of the large, inhospitable Great Indian Desert , which has an edge paralleling the Sutlej-Indus river valley along its border with... |
1992 |
| Bhartiya Manav Samaj Kalyan Sanstha (BMSKSS) | Deoria Deoria Deoria is a town in the state of Uttar Pradesh, India. It is one of 5 tehsils of Deoria district. The name of the Railway Station is Deoria Sadar.-Ancient:... |
Uttar Pradesh Uttar Pradesh Uttar Pradesh abbreviation U.P. , is a state located in the northern part of India. With a population of over 200 million people, it is India's most populous state, as well as the world's most populous sub-national entity... |
|
| darabar-sahitya-sansad (DSS) | Khurda | Orissa Orissa Orissa , officially Odisha since Nov 2011, is a state of India, located on the east coast of India, by the Bay of Bengal. It is the modern name of the ancient nation of Kalinga, which was invaded by the Maurya Emperor Ashoka in 261 BC. The modern state of Orissa was established on 1 April... |
Rang De Volunteers
A Rang De Chapter consists of a group of volunteers living in a city (in India or abroad) that would like to do more than making a social investment to fulfill Rang De's vision of making affordable micro-credit in India a reality.Anybody can join a Rang De Chapter provided they are residents of the city the Rang De Chapter is in.
If there is no Rang De Chapter in a particular city and somebody would like to create one, they can follow the instructions on the Rang De Chapter Portal.
See also
- Flat rate (finance)Flat rate (finance)Flat interest rate loans are often used by traditional moneylenders in the informal economy of developing countries. They are also used by many microfinance institutions. One reason for their popularity is their ease of use...
- MicrocreditMicrocreditMicrocredit is the extension of very small loans to those in poverty designed to spur entrepreneurship. These individuals lack collateral, steady employment and a verifiable credit history and therefore cannot meet even the most minimal qualifications to gain access to traditional credit...
- Microcredit Summit CampaignMicrocredit Summit CampaignThe Microcredit Summit Campaign is an American non-profit organization started as an effort to bring together microcredit practitioners, advocates, educational institutions, donor agencies, international financial institutions, non-governmental organizations and others involved with microcredit...
- Social entrepreneurshipSocial entrepreneurshipSocial entrepreneurship is the work of social entrepreneurs. A social entrepreneur recognizes a social problem and uses entrepreneurial principles to organize, create and manage a venture to achieve social change . While a business entrepreneur typically measures performance in profit and return, a...
Rang De Websites
Rang De on social media channels
- How RangDe.Org Works - Video on Vimeo
- Rang De on Twitter
- Flickr: RangDe.Org's photostream
- Causes on Facebook | Rang De
- Rang De Group | LinkedIn
- orkut - Rang De
Media on Rang De
- MoneyControl.com - RangDe.Org - India's first microlending site launched
- DNA - Giving is cool
- Ergo - Reaching out to the needy
- Outlook Money - Investing For a Cause
- livemint.com - P2P lending companies bring funds to the poor
- Water, No Ice - Rang De – Share the colors of joy!
- Venture Beat - Social start-ups may prosper in downturn
- Business Standard - A portal that lures the Mohammed Younus in you
- The HeadStart Network! - Rang De : Turning Charity into Social capital