Yes, 100%.

Milaap is currently is backed by private funders who are supporting our operating costs. The borrowers pay an interest on the loan, which is usually split equally between Milaap and the Field partner.

For example, for every Rs 100 lent to a borrower, on an average the borrower pays Rs 8 as total interest in a year, which is shared between the Field Partner and Milaap. (This is paid as 65 paise, approximately every month) Our costs are mainly to cover Paypal fees (3%) as well as that of our on-ground field partners who appraise the borrower, collect the repayments, reporting etc.

100% of the amount you lend on Milaap.org goes to the end borrower. We do not keep any percentage of it to cover our costs. In our effort to ensure that 100% of your contribution goes to the end-borrower, we even absorb the 3% transaction fees charged by Paypal on every loan our lenders make. To help cover our costs marginally, we need to charge interest on the loans to the borrowers. Moreover, the field partners spend a lot of time and effort in identifying the borrowers and reaching out the them, because they are largely an unbanked segment. The interest we charge helps us partially with the running costs and insurance cover on the loans which is necessary because these loans are unguaranteed.

Milaap is not a non-profit organisation, or an NGO. We are a mission-driven social business, a company where social aims are primary, and that profits are secondary.

In order to scale Milaap and reach as many families as possible, we raised capital & resources from social investors to fund our technology, field operations and other long-term expenditures. Our goal is to be a self-sustainable organisation.

It has been seen that low-cost loans at justified interest rates are repaid comfortably if the loans are used to pay for amenities and services that improve living conditions of the poor. Once basic needs like clean drinking water, sanitation and lighting are taken care of, a lot more time and energy is freed up and it paves the way for real progress.

Therefore, Milaap's model of livelihood finance focuses on designing customized credit programs to loan not just for income generation but also for access to basic facilities.

Milaap's underserviced borrower communities in India use your low-cost, online loans to access basic services, including job-oriented training, energy, water, health & sanitation, and sustainable links to markets for dignity, well-being, and an improved standard of living.

Milaap's "hand-up" and not "hand-out" philosophy builds relationships on mutual respect and dignity. Our lending model eliminates the indefinite wait of traditional grants and it enables people to manage their own requirements as and when needed through a transparent and structured system.

The access to affordable credit at nearly 50% cheaper than the existing credit available to small value borrowers ensures that people value the service and maintain their credit worthiness.

Importantly, Milaap's model allows for re-lending of repaid loans. When your borrower repays your loan, you can choose to re-lend it to another borrower. By doing this, you create a liquidity cycle that can help many people in need of credit. This way, your one-time contribution helps make a difference to multiple lives when you choose to re-lend you money.

Loans facilitated and disbursed by Milaap and its field partners are given at interest rates that are 50% cheaper than existing credit available to small value borrowers. Further, the time saved and the improved quality of life resulting from access to basic needs allows our Milaap's borrowers to focus on work and increase productivity, resulting in higher income and reduced monthly expenditure with a positive long-term impact on living standards.

Although critical services and products may not directly lead to income generation, it does lead to additional saving, reduced expenditure and time saved which contributes to a positive effect on the income and standard of living in the long run.

For example, building a toilet at home for a family means reduced health hazards which will otherwise translate to high medical expenses and decreased productivity. Another example is the benefit of installing a safe drinking water connection - it creates savings for a household by helping reduce high expenses for potable water, sometimes over 100%, to private vendors or water mafias. It also means time that is otherwise spent on queuing or walking long distances for water can now be spent more productively.

Milaap's field partners monitor the progress of the borrowers throughout the loan cycle to ensure effective use of both the loan amount and the market links provided. Regular monitoring enables us to intervene with additional support if required and where possible. Beyond financial scalability metrics, Milaap uses relevant impact measurement tools for tracking.

Qualitative indicators include real-time SMS and web updates from loan agents, quarterly journals, and evaluation videos that are shared with lenders on our website. Our quantitative indicators include systems developed by the Grameen Foundation to measure progress out of poverty at completion of the loan cycle. Currently we are aiming to implement the social performance reporting tool by IIXAsia, Asia's First Social Stock Exchange, to our field partner screening process.

Milaap has a three pronged approach to maintaining low costs:

1. It has developed excellent relationships with partners that enable access to free or subsidised services. One97, a leading mobile services company has committed the services of their payment gateway, PayTM, for all Indian transactions.

2. It has meticulously built efficient processes backed by robust IT systems, which help to automate a substantial portion of the activity, thus significantly reducing Milaap's manpower requirements.

3. It hires highly competent employees driven by high levels of social commitment who have offered to undertake their responsibilities at lower pay than conventional corporate scales.

We encourage everyone with the intent to loan for social impact in India to make a loan on Milaap.org. Our loans start from USD 50 for foreign nationals and INR 1000 for Indians. This differential minimum loan amount is offered after taking into consideration the lending capacity of a large number of Indians.

We also support corporations who may want to give higher value loans using Milaap. We design special corporate lending programs and develop CSR initiatives with corporations using our offline or direct interaction lending option.

There are primarily two ways to lend through Milaap:

Online Loans - www.milaap.org

Offline Loans - cheques and electronic fund transfers. View our terms and agreement to know more.

Online lending is best suited to individuals making a loan of less than USD 2207* or INR 100,000, 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.

Our online loans are currently made via Paypal. Even if you don't have a PayPal account, you can lend as a guest on PayPal. This is to ensure seamless facilitation and strong backend support. We will soon have an Indian payment gateway (PayTM) for Indian residents. Our offline loans can be processed through cheques or electronic fund transfers.

*Exchange rate: INR 45.315 per USD

Milaap is a lending service that takes loans and not donations made by you to impoverished borrowers across India. All loans made through Milaap are repaid by borrowers thus these loans unlike charitable contributions that are not returned to the giver are not tax-exempted.

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, our lenders need to bear a minimal transaction fee of 5% on the loan amount, that is charged by PayPal.

You will receive an email confirmation, once your loan transaction is successful. This email includes details on the borrower, the loan cycle, date of loan, and area of focus. To make a loan on Milaap you register as a lender with a Milaap account that consists of all loan specifications, including monthly updates on the utilization and repayment of your loan.

Milaap's policy is to transfer 100% of the loan amount to the end borrower.

Your loan enables impoverished borrowers to source better livelihood means and access critical services, essential for health and dignity. From our documentation and analysis, we have learnt that the quantitative value of impact for every dollar loaned through Milaap is approximately 15.6 dollars in savings, reduced expenditure, and incremental income.

Why are there different loan repayment periods for different borrowers? Milaap and its field partners work closely with borrowers to create customized credit programs that take into consideration the borrower's income and expense ratio and the regularity in cash flow while setting a repayment schedule that is realistic and can be honoured. Loan repayment schedules on Milaap usually vary from 12 to 24 months.

Milaap Credit is accrued on online loans only. During a loan cycle, the amount repaid every month by the borrower is accumulated online in your Milaap account as Milaap Credits. Milaap credits can be reused to loan to other borrowers or can be accumulated for withdrawal at the end of the loan cycle.

On receiving the first loan installment you will hear from us on email. Should you decide to withdraw this amount, we will process the transfer from Milaap Credits to actual money through PayPal or Electronic Fund Transfer.

On online loans, the entire loan amount is repaid at the end of the loan cycle, which typically ranges between 12 to 24 months.

On offline loans, the repayment sum and the loan cycle is determined as per the need and the terms of the customized corporate lending program.

Once your loan amount is fully repaid we will send you an email. You can then decide to withdraw this amount or re-loan it; in case of withdrawal we will transfer the entire loan amount through PayPal, PayTM, or Electronic Fund Transfer to your credit card or bank account.

When you login to your Milaap account, you will see an option to ‘Auto re-lend.’ When you choose this, you no longer need to wait until your credits reach the minimum loan amount to lend to another borrower. We will automatically do so on your behalf to a borrower chosen based on the urgency of need.

Instead of letting your credits lie unused in your account until it reaches the minimum loan amount, or until you have the time to pick a borrower to re-lend, you can let us take care of it. Rather than wait until you accumulate enough credits to make a loan on the site, auto re-lending ensures that as few as 50 credits will also get reused. This way, you also make your contribution go the extra mile!

When you login to your Milaap account, uncheck the Auto re-lend option, or just send us an email to feedback AT milaap DOT org. We’ll send you a confirmation email and opt you out.

Traditionally Milaap's borrower demographic includes people from low income households that require a loan of less than INR 50, 000 in a year. Our borrowers age between 18 to 50 years and are members of Self Help Groups (SHG) or Joint Lending Groups (JLG). This demographic may occasionally vary according to the loan program and the field partner.

Milaap believes that everyone, irrespective of gender should have access to credit that can contribute to an improved standard of living. We provide small loans to any borrower who is a member of our carefully selected partner organization and thus naturally belongs to a SHG or JLG.

Milaap works with local, experienced organizations to select the borrowers in our focus areas of Education, Energy, Water, Health & Sanitation, and Sustainable Farming. Our local field partners and their staff have a deep understanding of their specific clients, cultures, and markets. After the borrowers have been selected based on their need, potential, sincerity, and repayment ability, we develop customized loan programs to disburse the loan and manage the loan process.

Currently, we have initiated and are managing four programs in the districts of three states in India: Tamil Nadu, Karnataka, and Maharashtra.

You can learn more about these programs and the locations on Milaap District Program and Impact.

Milaap has a unique medium to ensure appropriate usage of the loans. We issue the loan amount to the borrower in coupons that the borrower can use to pay for a service. We also have regular monitoring procedures that assess the progress of the borrower toward the established goal.

Some loans, especially in the health and education areas may be immediate need loans, where support is required without delay. In such cases, the need and the situation is assessed and borrowers receive loans from our field partners before the profile and requirement is posted on Milaap. However, once on our website these loans are treated similar to all other loans on Milaap.

All loan requirements on Milaap have a display life of 30 days during which the loan amount needs to be raised. The "invest-by-date" indicates the last date by which loans can be made to a particular borrower.

Each borrower supported by you on Milaap gets to avail of our services. According to policy, we fund the deficit amount on the loan from our corpus and transfer the full loan amount to the borrower, trying to ensure that our carefully customized loan programs have an effective start.

Each borrower pays a different rate of interest determined by the loan program and field partner. Typically, our loans are given to borrowers at 12% to18% interest, which is nearly 50% cheaper than all other microcredit available currently.

Milaap and its field partners facilitate lending on Milaap's product and they manage disbursement, monitoring, and collection of loans. To ensure quality administration and to cover part of our operating costs, borrowers are asked to part with a nominal interest of 12 to 18%, which is nearly 50% cheaper than the current interest rates charged by existing microcredit loan services.

Milaap usually keeps no more than 6 to 7% of the interest amount, while the rest is kept by the field partner for their rigorous field work.

Milaap follows strict policy measures to cover all risks to our lenders. Our standards and processes have been laid out with the advice of our highly qualified advisors, who have significant experience in microcredit and financial services.

Our field partners are selected after rigorous due diligence to ensure that they have a grounded understanding of the borrowers needs and capabilities. Our field partners have a strong market presence and over three years of experience interacting with borrowers.

Another credibility assurance is the faith vested in us by institutions such as the Indian Institute of Management, Bangalore (IIMB), where we are incubated and the National Singapore University.

Since we began operations in 2010, we have had no borrower defaults on loan repayments.

There are 3 kinds of risks that you must be aware of while lending on Milaap:

1. 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.)

2. Field Partner Risk
Milaap delivers your loan amounts to the local field partner. While 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 turn faulty.
» 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)

3. Macro Risk
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)

Microcredit Loans made on Milaap are voluntary and are not treated as guaranteed investments. There are three types of risks involved in lending on Milaap: Borrower Default, Field Partner Default, and Macro Economic and Political Risks. Though, we take strong measures to select our field partners and screen each borrower and till today we have not had any untoward experiences, we suggest that all lenders recognize the possibility of risk while deciding the loan amount.

Each field partnership is formed after rigorous due diligence that involves organization visits, financial audits, and borrower interviews. Our field partner evaluation also consists of the following assessment criteria for which we use structured evaluation measures.

1. Field partner experience in disbursing and managing loans

2. Field partner policies and practices in borrower selection

3. The range of projects and borrowers to ensure the risk-spread

4. The loss reserves they maintain to mitigate the risk of default

Milaap's capacity building tools that include the use of SMS and web-based reporting create transparency and accountability at all stages, further alerting us on any discrepancies in the process.

Milaap does not accept donations from individuals. The best way to support us is to lend through our platform, support the borrowers in need and demand a good service. Our field partners pay us a fair charge for our service.

We've received an initial seed investment from social investors to subsidize our costs till we reach self-sustenance.

Milaap gives you complete flexibility in choosing the cause and the borrower to lend to. Our lending service facilitates a transparent and reliable transfer of 100% of your loan amount to borrowers who need it the most at 12-18% interest, which is 50% cheaper than existing microcredit.

Our loans for critical services and income generation activities treat the financially challenged as dignified customers, who deserve access to valuable opportunities and resources for health, security, and an improved standard of living.

We have a thorough selection and due diligence process for appointing field partners, who must have at least 3 years of market experience, stringent management and financial norms, and a relatively strong loss reserve ratio to the loans disbursed.

Milaap and its field partners conduct regular checks and have dialogues with borrowers to monitor the use of your loan and to give you detailed feedback on the progress and impact.

To ensure that your money reaches the right people and is utilised appropriately Milaap has a unique disbursement model, where instead of cash we issue coupons to borrowers, who are interested in availing of basic services.

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 in turn can exchange the coupon for cash from the field partner once the necessary service has been provided. Our coupons are a credit note - a guarantee - for the service providers and they ensure loan utilisation by the borrowers toward the specified need.

Milaap sees its role as that of a social impact accelerator, which involves developing relationships between field partners, non-government organizations, lenders, corporations, and borrowers in our core areas of focus: education, energy, water, health & sanitation, and sustainable farming. Milaap is the enabler, the one that facilitates change, encourages participation, and builds relationships. We intend to stay on course with our key objective and strengthen the infrastructure and facilities required to develop the underserviced and impoverished as a strong and respected customer base, deserving of access to critical services and improved opportunities.

Milaap is always looking for partners in new regions to help expand livelihood opportunities. We are glad to hear from all organizations that meet the following basic criteria; for partnerships you can email us at anoj@milaap.org

1. Non-profit status under Company Section 25

2. Should have been carrying out credit activities in at least one of our focus areas

3. In existence for at least 3 years with audited financials and a strong management and financial foundation

4. At least 1000 borrowers served