September 30, 2013; Dutiee


Milaap (defined on their website as Hindi for “unity”) is the only microlending platform with the leeway to allow foreigners to make loans to the poor in India. Giving or lending to India, a country where at least 269.3 million people (21.9 percent of the population) live below the poverty line, has been hindered by the government’s tight banking regulations since the microfinance crisis in 2010. Milaap, though, convinced the Reserve Bank of India to approve small loans to microbusinesses in India. Not only that, but it has been successful in raising $1.1 million in venture capital funding from investors, including Skype’s co-founder, Toivo Annus.

Where Kiva, among other crowdfunding sites, offers loans to individuals interested in starting small businesses, Milaap is distinct for its focus on “making loans available to low-income families to buy products and services that would greatly enhance their productivity.” Anoj Viswanathan, co-founder of Milaap, observes that, “Microfinance institutions are helping [the] poor start businesses, but not really helping them meet their day-to-day needs. Through our loans, people can get access to water, light, education, and other essential things that would help increase their productivity and income.”

One of three cofounders, Viswanathan was working in microfinance when he saw the difference $10 solar lights bought on credit made to underprivileged households in Orissa. It was then that he realized that the main factor in the failure of such products to make a bigger impact was the lack of low-cost interest. He teamed up with two other young Indian entrepreneurs, Sourabh Sharma and Mayukh Choudary, to found the social enterprise in December 2010.

Sourabh Sharma admits, “The very concept of enabling [the] poor through loans and not donations was new to people, specially in Asia. People couldn’t relate to the idea of helping poor through loans and were not very forthcoming[. Also,] the fact that we were a for-profit and not a nonprofit was not accepted easily.”

Sharma’s counsel to other social entrepreneurs is that it’s tough: “You have all the challenges of a regular entrepreneur and more. You can’t play on the fact that you are in the social sector and have a mediocre website and talent. You have to provide the same kind of experience to people that they are use[d] to getting, especially if you are on the web. Remember that you are trying to get people to do something they usually don’t do, so give them the best possible experience, right from your first sign-up form to your thank you note.”—John Godfrey