When Muhammad Yunus and the Grameen Bank were jointly awarded the Nobel Peace Prize, the Norwegian Nobel Committee said “lasting peace cannot be achieved unless large population groups find ways in which to break out of poverty”.
And that is exactly what we aim to do at Rang De — help large groups of people find their way out of poverty.
But with 276 million Indians living below the poverty line, how do we decide who gets help?
The plight of women & the community in the area
Before choosing to work in a certain geographic area with a certain Impact partner, we ask ourselves if it will truly benefit the women there and whether they will get involved in economic activities.
We try to reach out to women in areas where there is a strong need for support or where they lack financial resources.
A Rang De loan should not only encourage a woman to play an important role in enhancing livelihoods, it should empower her to have a greater role in the community.
We are most interested in underserved communities — these could be nomadic communities, differently abled individuals, sex workers, remote villages or tribals.
Such individuals rarely have documents or access to credit but are now being connected to the outside world and Rang De would love to be their first financial partner.
The health of SHGs
How do they get the loans? Usually, these loans are disbursed through self-help groups where women gather in groups of 8–10 individuals and discuss their problems in life.
The organisations that we work with maintain the health of such SHGs. They do not just disburse loans or only focus on collecting repayments.
The monthly meetings that these women attend are a platform for them to voice out their concerns. They create peer pressure in a good way — when women see that others are working actively to improve their lives, they realise the importance of hard work and diligence.
People’s institutions — self-sufficiency and sustainability
At Rang De, we also partner with people’s institutions at the grassroots level. They are formed by the people, for the people and are led by people with influence and power. When they start identifying borrowers, we indirectly build the capacity of the women of the area and they become resource persons.
We know that we are not a permanent solution in a community.
But we do ensure that even if we withdraw from a particular area, these people’s institutions can take up ownership and continue the good work.
Once we identify a community that needs help, we cannot enter it directly. The people need to trust us so we go through an Impact partner—an organisation that has done done meaningful work and regularly keeps in touch with the community.
These are medium-sized institutions as rural welfare organisations that are too large find it difficult to combine their micro-finance operations with the necessary impact assessment to ensure actual development is taking place on the ground. On the other hand, small institutions do not have the manpower or the resources to make an impact in hundreds of villages in an impoverished area.
Before finalising on an Impact Partner, we go through a gruelling screening process where we try to understand their financial situation, outreach and the programmes they have been involved in. Usually, these organisations have a strong vision and are clear about what they want to do and take pride in their role strengthening the livelihoods of the people they work with.
The organisation must have functioned in the area for at least three years and must not have any political or religious mandate. They usually have plans for sustainability that gives us reassurance that they will continue the good work as proper development requires decades of intervention.
Not adding on to the burden of other sources of credit
Other micro-finance institutions (MFIs) have subtle ways of creating pressure on a community to take loans. We try to make sure that the areas where Rang De loans are disbursed are devoid of MFIs. We avoid going to areas where people have taken loans from multiple sources as we do not want to weigh them down with our loans.
Our objective is not to just give loans. It is to understand women’s needs and help them. If women have access to personal loans from banks — and our loans help them get there — then our intervention is not required.
We try to reach out to people who were in the grip of moneylenders. We reach out to people who do not have access to many facilities. We try to intervene and help people who were dependent on the wrong source of finance move to a system that works for them.
We aim to create a culture where the poorest of the poor will get a loan.
We hope a day comes when everyone that wants to get out of poverty has a chance to do in the fastest manner possible at favourable conditions.
In many ways, we consider it to be an absolute human right.
For any further queries on the Rang De process, please write in to firstname.lastname@example.org and we would be happy to respond.
After 11 years of operations, Rang De is now taking a massive leap forward with our brand new peer-to-peer lending platform rangde.in. Check it out.