Sometimes elephants get created by connecting disjointed inputs. An entrepreneur Narain sent me this article from Business Week. This is like an eBay for loans.
I also saw an advertisement in the paper where Ministry of Information & Technology is interested in funding SCA ( Service Centre Agency) which will manage CSC ( Common Service Centres).
Now I know most people are cynical about GOI but entrepreneurs go where angels fear to tread . Is there an opportunity to learn from Prosper and apply it to all kinds of lending in India including the 600000 villages
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The big success story on this front it obviously SKS Microfinance, which recently received a 2.5 Million Investment from Vinod Khosla
From their website ” SKS Microfinance (SKS) is one of the leading providers of microfinance in India. Founded in 1997, SKS has delivered over $50 million in microfinance to over 200,000 women clients in one of the poorest parts of Southern India. In the last year alone, SKS grew by nearly 300% and has a current portfolio of $19 million with a 99% on-time repayment rate. At present, SKS has over 80 branches and 850 employees and is expanding rapidly in Andhra Pradesh, Karnataka, Maharashtra, Orissa and Madhya Pradesh. At the current pace, SKS will reach its goal of 700,000 clients by 2007.”
In the similar nature, there is a firm in UK [http://www.zopa.com] which I already mentioned in the email doing a similar work. The microcredit industry in India is largely scattered without any organisation.
There are Women Self Help Groups across India, which follows a similar model. If you are in Mumbai, check out the works by Seva [if i remember the name right], which in fact, HLL has utilised for Project Shakti in rural areas.
Very interesting, and possibly worth a try in India.
The idea of decreasing defaults through groups is very interesting — I think this concept has been tried by ICICI or someone to lend to self help groups, and the experience was very positive (in terms of low default rate)… Of course, do it on a mobile instead of (or in addition to) internet.
Maybe entrepreneurs could raise money here as well 🙂