A few quick updates on the developments that have taken place at Rang De since the issuance of the Reserve Bank of India guidelines on the regulation of Peer to Peer (P2P) lending platforms in India in October 2017.
After careful deliberation, Rang De has decided to launch a Non Banking Financial Company (NBFC) that will apply for a NBFC — P2P license.
To apply for a NBFC P2P license, Rang De needs to raise at least Rs 2 crores as net owned funds. We are looking for like minded equity investors (who could be Indians or foreign nationals) who will help us reach this target.
Social investors like you can make investments through the new P2P NBFC platform, which complies with the RBI’s stipulations (more about which you can read here) while retaining many of the positive features of the existing platform. Importantly, the new P2P NBFC will allow us to continue serving the borrowers in communities that are financially excluded by providing them access to affordable credit and foster their inclusion into the formal banking system.
However, setting up of the new P2P NBFC will take us at least six months, which is why many of the borrowers will be continued to serve through the existing platform (www.rangde.org). In addition, rangde.org will also continue to serve those borrowers who will require time and support to set up, access and regularly transact on their individual bank accounts.
In the meanwhile, the existing platform will continue to provide credit to communities via charitable donations that individuals can make. www.rangde.org will continue to follow the existing model of providing low-cost loans and collecting repayment with one crucial difference: while the Rang De credit can still be invested multiple times, it will not be available for withdrawal.
We aim to implement this change by 4th January 2018.
As existing social investors, there will be two options available to you with respect to your past investments (note: past investments here refers to any social investment made before January 4th 2018).
1. Set up a withdrawal request: From 4th January onward, you can login into your Rang De account and provide the details of the bank account where you would like the repayments made by the borrower to be credited.
Rang De may need to process withdrawal requests in a phased manner, to ensure that the borrowers who are awaiting the release of their loans are not adversely affected. Therefore, we request your patience and cooperation in this matter.
2. Convert Rang De credit into donations: From 4th January onward, you can choose to convert your Rang De credit (and the future repayments you may receive) into a donation on the revamped www.rangde.org platform.
Please note that while you can still use the Rang De credit to re-lend to borrowers, you cannot withdraw the money.
As you can understand, this change will substantially impact Rang De’s existing borrowers. We are hopeful that the revamped platform will be able to attract donations of same volume and value that will allow us to fulfill the credit requirements of the community. At the same time, we are mindful of the possibility that this may not be the case.
Therefore, over the course of the next few months, you may see fewer loan profiles on the Rang De platform as we slow down demand curation in anticipation of a reduction in our fund raising ability.
We hope that you will bear with us while we transition into the next phase.
Please feel free to write in with your suggestions, comments and queries at firstname.lastname@example.org. We would like to thank you for being part of our decade-long journey to alleviate poverty in India by providing low-cost loans. We look forward to your continued support in the near future.
Co-founder & CEO