Update — Rang De Education Loans

February 12, 2010
By Rang De Team
By Ramakrishna Nk, Rang De Team

After a very inspiring TEDxHitechCity Meet at Hyderabad, Aishwarya (member of the Rang De Hyderabad Chapter) and I decided to take off to the Charminar area to meet some of the recipients of our education loan. Aishwarya took half a day off and we both set off with a list of people we wanted to meet. Rang De Education was launched only last year and the Rang De team was curious to know how it has spanned out. We were also looking forward to learnings, that will help us fine tune the model.

Rang De Hyderabad Chapter member Aishwarya Mishra (right) gets more insight into Rang De's education loans through the Roshan Vikas team.

Rang De Hyderabad Chapter member Aishwarya Mishra (right) gets more insight into Rang De’s education loans through the Roshan Vikas team.

A brief interaction with the Roshan Vikas team members was followed by a meeting with 15 borrowers that formed a group. In terms of target audience, we were bang on. Most of the women there had more than 2 children and it was a tall task for them to send everyone to school. A common thought that struck both me and Aishwarya — if they were keen on their children getting educated, why not pay up the school fees on a monthly basis. Why do they prefer paying EMIs?

We were amazed with the answer — since the loan is taken by members of a group, the members were attuned to a financial discipline which they may not otherwise follow. Usually the kids ended up paying the price and were used to being sent out of the class or were not permitted to write their exams. It suddenly struck us big time that the ‘group factor’ in micro finance seems to work wonders.

Being the first time for Rang De at Education Loans, there were several teething issues and I hope we as a team are able to learn from our past and have a more fine tuned model this time around. Here are some of the learnings that we are going to work on:

1) Communicate the entire process and explain the product to the field partner in detail.
2) Enough ground work to have been done to understand the nuances before designing the product.
3) To bear in mind the practicalities and issues that our borrowers may face.

Much to learn from these interactions and adopt for us at Rang De.

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