No. 549, 26th Main,
14th cross, JP Nagar phase 1
Bangalore, India - 560 076
e-mail: feedback AT milaap DOT org
phone: +91 8880340333
Milaap enables you to lend to India's working poor so they can get access to education, clean water, safe lighting and more.
A small loan goes a long way. And comes back to you.
The impact of your loans on Milaap are worth several times the actual amount – each dollar loaned generates about 15.6 dollars in savings, reduced expenditure, and incremental income for the borrower. Your loans help borrowers access opportunities and resources which make way for a healthier and an improved standard of living. That is why micro-lending on Milaap is an impactful way to make a difference.
There are three aspects to your lending process:
Selecting a loan
All you need to do is choose the cause and borrower to lend to; we do the rest.
Milaap screens and selects the field partners and borrowers who are listed on milaap.org. Working closely with our field partner, we ensure the authenticity of the need of the loan. Then, we develop customized loans that take into account the unique requirements and abilities of the borrowers.
Milaap currently focuses on six critical areas: Education, Energy, Water, Health & Sanitation, Enterprise and Sustainable Farming.
We have a thorough selection and due diligence process for appointing field partners – they must have had at least 3 years of market experience, stringent management and financial norms, and a strong repayment rate.
Milaap's capacity building tools that include the use of web-based reporting, create transparency and accountability at all stages, further alerting us on any discrepancies in the process.
Despite the precautions that Milaap takes in field partner and borrower selection, there are three types of risks you should be aware of when deciding to give a loan:
Borrower Default Risk
Milaap takes strong measures to ensure that each borrower in the local field partner's operating zone is screened thoroughly. However, there are still a few factors that can result in borrower default:
- - Natural causes (e.g. crop failure, floods)
- - Health issues (e.g. malaria, HIV/AIDS)
- - Unforeseen issues (e.g. theft, reduced remittance, civil disturbances etc.)
Field Partner Risk
Field partners take care of matters directly related to the borrowers. Although working with field partners increases the likelihood that your loan will be effectively used and repaid, there is a possibility of new institutional risks where while the borrower repays the loan the field partner may default.
- - Bankruptcy (ex. the field partner may go out of business and be unable to collect your loan)
- - Fraud (ex. a staff member in the field partner's organization may embezzle funds)
- - Management Upheaval (ex. The field partner may lose its decision makers )
When lending internationally, it is important to consider macro risks, such as:
- - Economic (ex. large currency devaluation or the rendering of the field partner's local currency as valueless by the exchange institutions)
- - Political (ex. Policy changes on funds repatriation or political instability)
- - Natural disasters (ex. a tsunami or drought may greatly reduce the likelihood of loan repayment from specific regions in a country)
Giving a loan
You lend a little, it changes a lot.
Your micro-loans are disbursed to the borrower using a unique model, where instead of cash we issue coupons to borrowers.
This ensures that the money reaches the right people and is utilised appropriately. For example: Borrowers who require a water pump installation in their home can take our coupon of specified monetary value to the village municipal body, who will in turn provide the necessary service and then exchange the coupon for cash from the field partner. Our coupons are a credit note – a guarantee – for the service providers and a monitoring and facilitation tool for the borrowers.
On Milaap you can lend either online or offline:
Online lending is for individuals making a loan of less than USD 2207 (*exchange rate: INR 45.315 per USD) or INR 100,000. You can choose an amount to lend starting from USD50 for non-Indians and INR 1000 for Indians. Any loan of over INR 100,000 can be made using our offline option.
Online loans are made through PayPal. Soon, distinct payment gateways for Indians and for non-Indians will be available. This is to ensure seamless facilitation and strong backend support. Offline loans can be processed through cheques or electronic fund transfers.
100% of your loan is transferred to the borrowers. Milaap does not charge lenders a fee to loan. We respect that an interest-free loan is an investment that lenders are willing to make to create positive social impact. However, lenders need to bear a transaction fee of 5% on the loan amount that is charged by PayPal.
Repayment of loan
A short cycle of 12-24 months (until full repayment) with monthly installments, and your loan is repaid. 100% of the loans have been repaid till date.
Milaap and its field partners conduct regular checks and interact with borrowers to monitor the use of your loan and to give you detailed feedback on the progress and impact.
Your Milaap account, which is created once you login with your Facebook account, has all details of your loans. This information can be accessed online from anywhere, at anytime.
Monthly loan repayments are deposited in your Milaap account as Milaap Credits. These credits can be reused to lend to other borrowers or can be withdrawn at the end of the loan cycle. To withdraw your repaid loan amount, you can issue a request from your account and we will transfer the entire loan amount through PayPal or Electronic Fund Transfer to your credit card or bank account.
Of course, we will urge you to re-cycle your credits. This way, you’re making the same amount of money benefit multiple borrowers. You can choose any borrower who needs a loan and restart the lending process. No transaction fees are involved and can be done with a few clicks, even from your phone!