Infosys co-founders NR Narayana Murthy, Kris Gopalakrishnan and SD Shibulal, along with former board members TV Mohandas Pai and V Balakrishnan — the key promoters of MicroGraam, a crowd-sourced, low-cost finance institution targeted at the rural sector — are gearing up to scale up its operations.
The plan is to scale up operations by over 10 times in the next five years by extending the reach to newer states. MicroGraam, which has been in operation for five years, is headed by chairman V Balakrishnan. The financial institution that largely targets rural women has raised R13.15 crore till now, and is targeting to take this up to R150 crore in the next five years.
Rangan Varadan, CEO, MicroGraam (also a former Infoscian), said it plans to reach over 60,000 borrowers from 9,000 currently and bring more number of states under its ambit. The finance marketplace currently operates in seven states in partnership with 32 NGOs. Now, it is looking at extending its reach to the North Eastern states and Bihar.
MicroGraam operates on a peer-to-peer lending model where the lenders are given the opportunity to invest in various rural entrepreneurial businesses with interest rate going up to maximum 18%, though the average is around 14%. This marketplace has a loan outstanding of R4.78 crore till March 2015 and 96% of its borrowers are women.
Varadan said it would undertake a marketing campaign to tap into newer financial resources and would also look at the CSR segment of the corporates.
MicroGraam’s key focus on lending has been to improve the productivity in the rural sector with extensive use of technology in the operations.
MicroGraam identifies the borrowers largely through the NGOs and other institutions which are directly connected with the rural sector. It said the repayment rate has been around 98.3%.
