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July 15, 2011

Profile of P2P Microlending enabler Micrograam

Business Today has a profile of the latest Indian adaptation of the model that enables individuals lend to the poor.

Micrograam, set up in February 2010 by Rangan Varadan, a former head of banking and capital market verticals at Infosys, has devised an innovative means of extending credit to the poor by creating a portal that brings investors and borrowers together, allowing them to work out their own deals. Micrograam's initiative has been a hit: in just 16 months it has found 270 investors and helped disburse loans of around Rs 87 lakh to 563 borrowers. The timing has helped too, since the microcredit sector is currently in crisis, and loans for the poor have dried up.

...Restricting its activities to Tamil Nadu and Karnataka, the Bangalore-based Micrograam has so far roped in 33 NGOs which identify borrowers. It puts up a list of prospective borrowers on its portal, along with each one's profile, the amount he needs and the maximum interest he can afford.

..."We do not want charity. We are looking for individuals who believe in social lending, not charity," he says. Around 80 per cent of his investors so far have been wealthy individuals rather than company employees, but Varadan is not fazed. The fact that Micrograam is not yet profitable does not worry him either. "Once we gather scale, we will sustain," he says. "This is how this model is meant to be." He has extremely ambitious targets. "We intend to get 16,000 investors and help disburse loans of Rs 25 crore in the next two years," he says.

Arun Natarajan is the Founder & CEO of Venture Intelligence, the leading provider of data and analysis on private equity, venture capital and M&A deals in India. View free samples of Venture Intelligence newsletters and reports. Email the author at