A matter of credit for India's Rang De

Leaving their promising careers in London in 2008, the husband and wife team of Ram and Smita dived into the deep end of India’s social sector to found Rang De. A micro-credit enterprise with interest rates lower than the lowest prescribed by India’s central bank, Rang De raised $32,000 in six years. Its laurels span the World Bank’s Development Marketplace Award and the Millennium Alliance Award. The partners tell NANDINI SANAN what made them take the plunge

By Nandini Sanan

Published: Sat 22 Feb 2014, 9:34 PM

Last updated: Fri 3 Apr 2015, 10:18 PM

Why microcredit?

Ram: In 2006, Muhammad Yunus had just won the Nobel Peace Prize (for his micro-credit venture, the Grameen Bank). The Indian micro-credit scene was very different, with interest rates as high as 50 percent. This was justified (on the ground) that these risky loans might not be repaid. But the repayment rate was 100 percent. This contradiction, mentioned in an article, caught our attention. A product designed for the poor cannot be so expensive. We questioned that logic and haven’t looked back ever since.

Both of you thought of the same thing at the same time?

Smita: I worked for an NGO where Ram volunteered. Our first meetings seemed to have set the tone for what was to follow. Although Ram was the principal software consultant for Vignette, Europe and I was working with the Oxfordshire County Council, we both knew what we were really meant to do.

Early experiences with social work?

Ram: My first tryst with bringing about positive change happened in college, when a fun event became a fund-raising event. I somehow became the go-to guy for the event and bunked 11 days of class for this. Surprisingly, I got full attendance! It was surreal as everyone around seemed to be looking beyond themselves. My principal called out of the blue, offering his car and driver to run errands. I can’t forget that feeling of being connected to a larger cause.

Smita: I was initiated into community work by my grandmother who believed one can’t live in isolation. She set up women’s groups, volunteered, and even began her own school where she and my grandfather taught for free. I was part of most of these activities. I didn’t really believe her, though, when she said, “Don’t worry about money, that’ll come. Just be sincere in whatever you’re doing.” But Rang De has proved her right, from our first funding to our awards.

Did you have a mentor?

Ram: Initially when we needed help on the legal structure of the organisation, a well-known law firm quoted Rs1 million for the job. It was a discounted figure but clearly not for us who had 6,000 pounds, all of our rainy-day savings! So we sent an SOS email to 10 people we thought could help. An almost instant reply from Dr Nachiket Mor became our lifeline. Now the chairman of the ICICI Foundation for Inclusive Growth, he became our mentor. He believed in Rang De more than we did at the time and gave us a fantastic launch into India’s social sector.

You blogged about Waheeda Rehman joining a field trip. What’s a day in the field like?

Smita: More than setting up operations it is about building a relationship with the community. On our early field trips we realised that just loans for livelihoods won’t work. We also needed to focus on education. We have recently developed a mentorship initiative for women entrepreneurs. We need to understand a community’s needs as much as they need to know that individuals around the world and not a faceless bank are funding their ventures.

Is it difficult working together? How do you strike a balance?

Ram: I am the talker or the self-appointed networker for Rang De. I used to go on the field trips but it was a complete disaster,as I am convinced very easily and never question the field partner’s systems or capability. Smita handles that much better.

Smita: Field trips, especially community meetings, recharge and refresh me. I find new meaning each time. It is amazing to actually see the impact of a small loan. The borrower community has a very high sense of self-esteem and has paid back each time, even when there have been floods! But we’ve had to bypass challenging partners sometimes to interact directly with the community. Travelling for events and networking, though, I’d happily leave to Ram.

What would be a dream come true for you?

Ram: I never thought we’ll survive so long or gain such wide acceptance. In many ways we are living a dream. A really significant impact, however, would be to disburse Rs50 million a month. We also think working with government machinery would be great as their reach is matchless. The Bihar Innovation Award takes us closer to that, as we can now operate at an unprecedented block level in totally backward geographies.

Will joining politics help your mission?

Ram: No, we don’t want to get into politics. That would be like trying to replace the government. We only want to complement them.

Do you consciously take a break from discussing work?

Smita: We never switch off. We’ve given up on that. Instead we’ve started to enjoy our enriching conversations (laughs). I’m making it sound very nice. But seriously, we would be fooling ourselves if we say we can stop talking work.

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