Rang De : A #CauseAChatter BlogPost

This year 2023 is my first time participating in Blogchatter’s campaign #CauseAChatter, where bloggers talk about a cause close to their hearts on social media, read and research and blog about their findings. This year they have changed a few rules and modified the entire journey for CauseAChatter, introducing Rang De and a chance for us bloggers to invest in change. So I educated myself, read articles online of the buzz words and financial lingo, and have summed it up here:

1.

Social Investment:

Social Investment is the use of finance to achieve a financial return on top of a social return. The money provided by the investors is paid back after being spent on making a better society. It helps fund a capital for achieving a social mission. The terms of repayment are flexible with low interest rates, as it targets those communities with low annual income. It is a method to bridge in the gap between the haves and the have-nots, the prosperous and the underserved. Social Investment is not a grant or a donation. But, the investors here are willing to accept higher risks and lower levels of financial returns for a greater social impact.

Impact Investment:

While reading articles and blogs on social investment I came across ‘Impact Investment’. My understanding is it brings in social impact and environmental impact under the same umbrella. Impact Investment can include social as well as environmental causes – climate, weather, etc.

 

Rang De:

 

We are aware about charitable organisations who handle crowdfunded donation drives for several causes. It has pure philanthropic motives and processes. ImpactGuru raises money on behalf of individuals suffering from major illnesses. Milaap organises fund raising campaigns for disaster relief, social, medical and educational causes. Donatekart works with NGOs and charitable organisations looking for fund raising.

But the concept of Social Investment is relatively new.

Rang De takes pride in being the first ever Social Investing platform in India. It is a peer to peer lending platform regulated by RBI. An NBFC – Non-Banking Financial Company. They facilitate providing microcredits to people from low-income communities, who cannot get loan from banks as they cannot afford major collaterals and mortgages. And their annual income is low for then to rely upon conventional credit systems. Rang De’s vision is to make poverty history in India. They strive to create a network of committed impact partners and changemakers. They play a crucial role in identifying the need and curating entrepreneur, farmer, artisan profiles, facilitating disbursal and performing other critical tasks like providing financial literacy training, hand holding etc. These partners can be mission aligned organizations who are already doing incredible work in their communities, and their partnership with Rang De helps to bring access to credit to the community and make their solution more holistic and effective.

It's been 15 years since Rang De’s inception. 15 years of educating public and transforming lives.

Microfinance and Rang De:

Microfinance loan is all collateral free loans provided to low-income households, i.e. households with annual income up to 300,000/- INR. It gives small business owners access to money. It has very low rates of loan repayment. In the larger picture, it bring about significant economic gains.

People can register on Rang De, evaluate the individuals requesting a loan and invest as minimum amount as 100/- INR. It is giving credit at a peer-to-peer level with a return on investment (ROI).

It surely has its own risk factors and the ROI might not materialize after the said time period, or might take a longer time, but that is a small risk looking at the bigger picture of social impact. It is like a small donation you make with philanthropic mindset for a cause that you care about and would love to see it progress into fruition, while the ROI is an added bonus.

The goal is not an investment method to grow your money in the long run – for that mutual funds would be a better choice, as Rang De provides credit access at the lowest rate, along with flexibility for the investees to choose exactly when and how much they want to borrow. But the goal is to take part in an impact journey, in a social cause that speaks to you and makes life more meaningful. There is nothing like actually contributing to someone’s life transforming journey.

Rang De curates these impact stories on their blog with diligence. It also organises field trips providing their registered social investors an opportunity to meet their investees. A chance to know the community up close and witness the impact of their social investment first-hand.

Rang De has a track record of 5.79% NPA. Non-Performing Asset. If the borrowers or investees fail to make payments beyond 90 days, then their account falls under the NPA (non-performing assets) category. For a social investing platform this is a very good score, owing to the recent pandemic. For details visit https://rangde.in/track-record . They have listed all their impact partners ie. NGOs and other organisations with full repayments and those with overdues. They have also listed the reasons for overdue, wherever available. So we as the investors can evaluate impact partners before investing in then. All being said, the ones with overdues are in most need of funds. So let the decision for investing be driven not just by financial aspect but the social aspect as well. For individuals investees ( a term Rang De has coined for borrowers who get the credit or loan) – we get to see their credit score and the purpose of the loan.

 

Be a social investor today. Invest in fellow Indians. Support Rang De’s mission of Financial Inclusion.

This post is part of Blogchatter’s CauseAChatter initiative with RangDe.