About Rang De
I'm confused, What's this initiative about?
Rang De supports rural entrepreneurs, artisans and farmers from low-income households by providing access to low-cost loans. We address the credit needs for business and education of the low-income households as well as organisations and collectives who share our mission and values. Rang De microcredit for business and education is funded by donations made by individuals and corporations.
What's the difference between the Rang De model and traditional micro-finance?
Rang De is an innovative attempt to bring down the cost of microcredit by using philanthropic capital to provide affordable credit services to low income borrowers. The main difference between Rang De and traditional microfinance is Rang De's focus on lowering the interest rate and its fund raising model. By raising donations from individuals, Rang De is able to bring down the cost of loans and offer them at rates that were once unthinkable.
How is Rang De different from other peer-to-peer lending platforms?
Unlike a peer-to-peer lending platform where money can be lent and the repayments can be withdrawn, Rang De accepts only donations from individual change makers. Each donation is effectively a changemaker’s own personal revolving fund that he or she can use to lend capital to borrowers. Rang De’s interest rates to the end user ranges from 2.5 % flat p.a. to 10% flat p.a. Our particular focus on communities who do not have access to financial services ensures that philanthropic capital comes from the ones who want to help and reaches the beneficiaries that need it the most.
What is the interest rate breakup on the loan products that Rang De offers?
The interest rate breakup of borrower repayments (in flat rates) for each of our loan products is shown below.
|Loan Product||Impact Partner||Rang De||Rang De changemakers||Innovation Fund||Total (Flat)||Total (APR)*|
|Working Capital for Artisans||-||2.00%||2.00%||1.00%||5.00%||8.98%|
|*APR interest rates are calculated on a monthly repayment schedule.|
The interest rate breakup of the yield to each stakeholder (in APY) for each of our loan products is shown below.
|Loan Product||Impact Partner||Rang De||Rang De changemakers||Innovation Fund||Total (APY)*|
|Working Capital for Artisans||-||3.59||3.59%||1.80%||8.98%|
|*APY interest rates are calculated on a monthly repayment schedule.|
Does Rang De accept donations?
Yes, we do! You can donate to our operations here or you can use our Donate to Fund option (read more about this option here). Both these options are exempt from tax under Section 80G of the Income Tax Act. You can download your 80G receipt here.
What is Swabhimaan?
Over the years, we have noticed that despite various changes in the system, a majority of women are still not able to access formal credit. Not only that, the levels of financial literacy are abysmally low making these women susceptible to falling prey to the perils of informal credit sources. Swabhimaan is an initiative to reach the remotest corners of the country and provide affordable loans to women borrowers. Swabhimaan uses superior technology with Aaadhaar and UPI as its foundation to pioneer a credit scoring system and credit score based loan approvals. Not just that, it also provides loans that are customisable. In essence, with Swabhimaan, rural Indians will have access to loans with the same level of flexibility that you enjoy in the city. Moreover, we will utilise the incentive of an affordable and attractive financial product to impart financial literacy to women so they can be better informed in the future when availing financial products from various sources.
Why do we need Swabhimaan?
Because we believe that we are on the cusp of change. We believe that technology has caught up to the extent that rural Indians can now be profiled and given fair credit ratings so that they can get loans at affordable terms with dignity. We want to reduce the inefficiencies in the rural credit ecosystem by producing a model that stands out as an example for others to follow.
Most loans that are provided at this point are not customised to the person’s needs. For instance, if a woman wants to borrow a small amount of Rs 2500 or 3000 to meet the daily expenses of the family, that option is not available to her. The only loan she can avail amounts to between Rs 10,000–15,000. Similarly, farmers could be required to repay loans even before the harvest is ready while they would be in a much better position to repay post-harvest. We want to give rural India this flexibility - in terms of principal amount, the tenure and the rate of repayment. We want to give them a loan which works for them.
What is the guarantee of repayment?
As a pilot project, we cannot offer a guarantee. Our experience over the past nine years, however, has helped us understand how rural microcredit should work. We firmly believe that with financial literacy training, data science and an element of empathy achieved through trained representatives (Rang De mitras) on the ground, we will continue to posit the impressive rates we have demonstrated so far. As you might know, our repayment rates are as high as 93% currently.
How is this different from the existing Rang De model?
Currently, we give loans at affordable rates through impact Partners — these are other NGOs, cooperative societies and organisations. While this model works, women who are not associated with a self-help group (a group of women who band together and are given credit together) are excluded from this model. More importantly, while in this model women get money and support to grow their business, they don’t get it with the same flexibility and respect with which you get a loan in the city. If you were to go to a bank, the bank would offer you a customised loan based on your financial capabilities and financial histories. We want to bring the same approach to rural India.
How will this project be implemented?
At the pilot village, we are installing something called bioscope that is a modern, digital version of the traditional bioscope that were used to watch movies. The Rang De bioscope will allow these women to undergo training in financial literacy, help them complete an individual assessment and let them apply for loans. All the relevant material will be made available to them in local languages as well. To ensure we don’t miss out on the human element, each village will also have a Rang De Mitra who will ensure participation in financial literacy session and help build the community to become model borrowers.
How can I help?
You can help us by supporting the women of Yeshwantpura village, who are part of our pilot initiative. You can also help us by spreading the word and helping us get in touch with interested parties that can help make this pilot project a success. We would love for you to reach out to us and let us know what you think as well at email@example.com.
What does this mean for the future?
If successful, we will look to replicate this effort in as many villages as possible. It will mean that all villages of India will be linked to supporters (or whatever it is that we are calling them) like you. It will mean that we will need the support of thousands of Indians like you as potentially millions of Indians from across the villages of India will look for an alternative source of credit.
What is Microcredit?
Microcredit refers to small size loans that are collateral free and are lent to low income households to meet their working capital needs. Typically, the loan size varies from Rs. 5000 to Rs. 40000. These loans are usually utilised for income generation activities. The borrower then repays the loans according to a pre-set repayment plan.
How can Microcredit make a difference?
Microcredit provides the much-needed financial stability that is needed in many low income households in Indian villages, semi-urban and urban areas. It gives them the opportunity to access finance at reasonable rates of interest and provides a healthy and sustainable alternative to the local money lender.
An example : Malabai Laxman Mujmule runs a grocery shop in their locality. Malabai, a differently abled individual, took over the store after her father passed away. With a phone, she calls suppliers and gets goods and attends to the store. She realized that she could earn more if she offered new items for sale but lacked the spare funds required for such an expansion. So she applied to Rang De for a loan. She now earns around Rs 7,000 per month and is able to save half of that amount becoming financially independent and making it easier to take care of her elderly mother.
Like Malabai, there are tens of thousands of people across India who want to make a beginning towards financial independence. And microcredit provides the means to achieve this independence.
How does traditional microfinance work?
Traditionally, microfinance institutions borrow capital from the banks at a fixed rate of interest of 5.5% to 8.3% (or 10% - 12% diminishing rate of interest) and the MFI (microfinance institution) then adds the cost of servicing the loan before disbursing the loan to the borrower. Thus, the interest paid by the borrower of microcredit ranges from 13.5% - 20% fixed rate of interest (or 24% - 36% diminishing rate of interest) depending on the cost incurred by the MFI for servicing the loan.
What is an MFI?
An MFI is a Microfinance Institution. Most MFIs are non-governmental organisations registered as trusts or societies. Microfinance is the provision of financial services to low-income clients or solidarity lending groups including consumers and the self-employed that traditionally lack access to banking and related services. More broadly, it is a movement whose object is "a world in which as many poor and near-poor households as possible have permanent access to an appropriate range of high quality financial services, including not just credit but also savings, insurance, and fund transfers". Those who promote microfinance generally believe that such access will help poor people find their way out of poverty.
What is a Microventure?
A micro-venture in Rang De’s context refers to a community owned/ managed enterprise that is engaged in a business activity. The micro-venture aims to solve the problem of market access and achieve economies of scale through collectivisation and by providing small-scale producers access to a common platform for marketing and essential services.
How do Microventures make a difference?
Microventures have helped weavers find markets, farmers learn new techniques and get input services at below market rates. By fostering cooperation and a business-oriented approach to livelihoods the micro-venture enterprises promote community development in a sustainable manner.
How do they traditionally get finance?
Traditionally, they can get loans from banks and other microfinance institutions but at high rates and at terms that are not always suitable for the organisation. While they offer stable wages to their members, they take on the risk of selling their wares (produce, woven products, food products etc) which makes it difficult for them to achieve sustainability.
How do Rang De loans make a difference?
Rang De loan products for micro-ventures are designed after careful consultation with the management and community members taking into account their differing needs and unique circumstances. Rang De loans offer them much-needed support and greater visibility often times helping them connect with individuals that are keen to partner further in advancing their social mission in their respective geographical area.
Why do you provide Education loans?
With parents of the children from the communities we work with often earning a very low income, it is a struggle for these children to consider studying beyond primary school. Oftentimes, these children also want to attend private schools as they offer better teaching and educational prospects.
Hence, we decided to offer education loans with interest rates between 2.5% - 6.5%, we offer the cheapest education loans funded by Indians helping students from rural areas go as far as they can. See the list of students seeking education loans here.
Why can't these students go to banks for Education loans?
It is often very difficult for these students or their parents to avail education loans because of a variety of reasons. With low or unstable incomes, traditional sources of finance do not consider them worthy borrowers and often deny them much-needed finance.
How do Rang De Education loans make a difference?
We have noticed that education financing for students from rural backgrounds works best when they are disbursed through organisations that work in the field of rural development. They understand the challenges that these students go through and give them mentoring and career guidance to ensure they achieve positive life outcomes.
Contributing on RangDe.Org
What is the minimum and maximum donation I can make?
The minimum amount is INR 100 and the maximum amount can be as high as one wants to contribute. A Rang De change-maker can also contribute to complete the loan amount for a borrower or split the contribution among multiple borrowers.
Where can I track my contribution?
You can log in to your account using your email address registered on www.rangde.org. Once you log in, you can access the details of your contribution, the borrowers you have contributed towards, and how much they have repaid, repayment progress made by all your borrowers. You will also receive a statement of the donations you make on a monthly basis from our team.
How do I make a donation?
You can make a donation in borrowers of your choice by following the steps below:
- View our borrower listing and enter the amounts you would like to donate to borrowers of your choice. Please note that the borrower receives a loan from the donation made by you that he or she would have to repay.
- Review your selection and continue
- Choose whether you want your share of the interest the borrower pays to be added to your revolving fund or be donated to Rang De for its operational expenses
- Make a payment towards your donation using Rang De credit (resulting from repayments from previous borrowers funded via donations only) or your preferred payment option.
You can also make a quick donation where you can enter the amount you would like to donate and the system will select borrowers on your behalf by following the steps below:
- Enter the amount of your choice.
- Choose your preferences by selecting the "Select borrowers using my preferences" option or let the system choose borrowers on your behalf by selecting the "Select borrowers using Rang De's preferences" option
- Choose whether you want your share of the interest the borrower pays to be added to your revolving fund or be donated to Rang De for its operational expenses.
- Make a payment towards your donation using Rang De credit (resulting from repayments from previous borrowers funded via donations only) or your preferred payment option
What is Quick Donation?
The quick donation option allows you to make a donation without choosing individual borrowers. You will be prompted to set your preferences based on which the system will allocate your funds to borrowers. In case, there are no borrowers meeting your preference, the system will allocate it when there are borrowers of your preference.
How is a donation on Rang De different from a regular donation?
Donations made by Rang De change-makers to provide beneficiaries listed on RangDe.Org affordable credit act as a revolving fund i.e. the donation amount is given to the beneficiary as a loan and he or she repays it back. This repaid amount accumulates as Rang De credit in the account of a Rang De change-maker and can then be redeployed to support another borrower in need of a loan.
Thus unlike a regular donation, a donation given out as a loan to a Rang De borrower can be recycled and reused as per the changemaker’s wishes.
Are donations on Rang De exempt from Tax?
Donations made to Rang De are tax-exempt under Section 80G of the Income Tax Act. Please note that a one time 80G certificate can only be issued for banking transactions that are made in the same financial year. This means that the redeployed Rang De credit (that is credit resulting from borrower repayments) will not be eligible for 80G certificate.
Do I receive an interest on the donated amount?
The amount that you donate to fund a borrower’s livelihood loan will earn an interest of 2.0% flat p.a. (3.5% APY). Your interest is calculated from the day the loan is disbursed to the borrower. This typically will be around a month's time from the date of contribution. You can also choose to forgo this interest by donating this share to Rang De- however these donations of interest are not eligible for 80G certificate. Alternatively, this interest will be added to your revolving fund along with a principal amount that the borrower repays. If you choose to retain the interest share your Rang De credit at any point will be a summation of the borrower’s repayment of both principal and interest.
Will I get a receipt for payment on making a donation?
When you make a donation on Rang De, you will receive an email notification confirming all the details of the donation. You will receive email notifications for all online transactions that you make on the website. Please get in touch with us if you do not receive these updates.
How does Donate to Fund/ Lend work?
Any donation made via Rang De by a changemaker is for an unsecured loan for a low income household. This donation that you make would be used purely to set up your own personal revolving fund that you can use to support various borrowers listed on the Rang De platform.
We recommend that you split your donations across borrowers in different geographies to reduce the risk in your Rang De revolving fund.
For the borrower, it is a low interest loan that needs to be repaid as per a pre-decided loan tenure and interest rate. The repayments (including the interest share that you would receive on your donation) that the borrowers make will be paid back into your Rang De revolving fund which you can then use again to provide credit to other borrowers.
You will get back your entire donation back in the form of Rang De credit at the end of the loan tenure (typically 1 year or 2 years) with a return of 2.0% flat p.a. (3.5% APY) provided there is no default. However, your principal plus interest is repaid as equated monthly instalments, and thus Rang De credit can be redeployed regularly and we encourage you to login regularly to select borrowers of your own choice or alternatively set up an auto donate instruction.
What are the payment options I can use to complete my donation?
If you are an Indian National, you can use the following payment options to complete your donation
- Credit/Debit Cards - MasterCard, Visa and SBI ATM-Cum Debit Cards
- Netbanking (All major banks)
- Mobikwik Wallet
- Ola Money
- Airtel Money
- Vodafone M-paise
- NEFT Transfer to our bank account after completing your donation
If you are a Foreign National, you can use the following payment options to complete your donation
- Credit/Debit Card
"Please note that Rang De has a special arrangement with its Payment gateway provider, under which you will NOT be charged any foreign transaction fee."
What is fund by date?
For every loan borrower who applies for a loan, there is a waiting period of 40 days during which the loan amount needs to be raised. The fund by date indicates the cut off date by which change-makers need to fund the borrower’s loan.
Why does the borrower pay 10.0% flat p.a.(17.97% APR) when the changemakers only gets a return of 2% flat p.a. (3.5% APY)?
As a changemaker, Rang De gives you the same return that you would earn on your savings bank account. The 10.0% flat p.a. that is paid by the borrower is split among the impact partners, Rang De change makers, Rang De and a fund for innovations. Rang De's impact partners play a very important role in identifying borrowers, disbursing loans and collecting repayments. The Impact Partner incurs expenses and the 5.5% is just about enough to manage these costs. Rang De gets 2% flat on every loan for its operational costs and 0.5% is kept aside to foster innovations and experiments.
What happens to the borrower if the loan is not completely raised in the time it was supposed to be raised?
In situations where the loan is not completely raised within the speculated amount of time, Rang De uses its Corporate CSR funds or the corpus funds to fulfil the balance amount. In some cases, Rang De may keep the borrower profiles active past the due date so that the corpus funds may be replenished.
I am a foreigner. How can I help?
Your options as a foreign contributor
As a foreign national, you can still make a donation either to our operations here or you can use our Donate to Fund/ Lend option. Do write in to us at firstname.lastname@example.org if you need any documentation for tax deduction purposes in your home country. Many of our Rang De change makers hail from different parts of the world and have joined us in the fight against poverty in India!
What is auto fund?
Auto fund is a feature that allows you to automatically redeploy your Rang De Credit. You can turn it on in your settings page.
How often will my Rang De Credit automatically get redeployed?
If you have selected the auto fund option, your Rang De credit will be redeployed as and when there is outstanding loan demand that has not been met within the stipulated time. The re-deployment will be subject to the availability of borrowers that fit your preferences.
Will I get notified once a redeployment is made?
Rang De Gift Card
What is a Rang De Gift Card?
Rang De Gift Card is an easy way that a Rang De changemaker can bring in the people they know into the Rang De family. Purchase a Gift Card for any amount that you desire and send it to a recipient who can utilise the amount as Rang De Credit that can be used to fund a borrower’s loan requirement on the platform. Please note that the existing Rang De Credit in your account cannot be utilised to top up a Gift Card.
How can I redeem a Rang De gift card?
- Visit the Gift Card Redeem page
- Enter the Gift Code included in your gift card and click redeem
- The gift card amount will be added to your Rang De Credit balance. You can check your Rang De Credit balance on your Rang De dashboard at https://www.rangde.org/dashboard
Note: If you are not logged in or if you don't have a Rang De account, you will be asked to create a new account. Please register or log in and then click Redeem.
What happens when a Gift Card is not redeemed?
A person receiving a Rang De Gift Card has to redeem it within 30 days. Once they choose to redeem the Gift Card the money gets added to their Rang De Credit, which can then be used to Fund the borrower(s). However, if the recipient fails to redeem the within 30 days then the Gift Card will expire and the sender of the gift card will be alerted. Thereafter the Gift Card can only be redeemed by the sender.
Withdrawing your Rang De Credit
I am an existing Rang De social investor and would like to withdraw the investments I have made. What are the terms and conditions for withdrawal?
Investments made by existing Rang De social investors before the 4th of January 2018 can be withdrawn. Please read through the following points for further details
- You can withdraw the repayments that are credited into your Rang De account.
- You can only withdraw the money that you have received as repayments from the borrowers. If the repayments are to be received post 4th January 2018, you can withdraw the repayments as and when the borrower repays. However any fresh transaction involving bank transfer of money would be treated as a donation effective 4th January 2018 and thus cannot be withdrawn
- The entire investment amount can be withdrawn only at the end of the loan tenure and on the condition that the borrower has repaid the loan.
- The minimum amount you can withdraw is Rs.100 (unless you do not have any outstanding repayments)
- Only if you have less than Rs 100 and no outstanding repayments will you be able to withdraw all of your Rang De Credit
- Withdrawals can only be made to a bank account in India.
How do I withdraw my existing Rang De Credit?
- Navigate to your dashboard by clicking here
- Click "Withdraw" in the dashboard header to the right side of your available Rang De Credit.
- Enter the amount of Rang De Credit that you want to withdraw and click submit after entering your account details.
What is the process once I have placed a request for withdrawal?
We will process your request and transfer the funds to your bank account. Rang De may require to process withdrawal requests in a phased manner to ensure that the borrowers who are currently awaiting their loans are able to receive their loans on time.
How will I get the withdrawal amount?
You can choose to get your withdrawal amount through a NEFT transfer
Are there any charges for withdrawals?
Yes, the charges are displayed in the withdrawal page under the corresponding options.
Can I withdraw my Rang De Credit to a bank account abroad?
No, we will only entertain withdrawal requests to bank accounts in India or an rupee pegged NRO bank account.
I have less than Rs. 100 of credit and I will not be getting any repayments. Will I be able to withdraw my remaining credit?
Yes you will. However, if your Rang De credit is less than the withdrawal charges, then you will not be able to withdraw it.
Rang De's Processes
How does the entire model work?
The model works as follows :
- (Potential) changemakers can search and fund the loan requirement of a borrower listed on the Rang De site. You can donate as little as Rs.100 to set up your own revolving fund.
- Rang De impact partners receive and disburse loans to the low income borrowers identified by them
- The borrower repays loan according to a repayment schedule.
- You receive your money in the form of Rang De credit at the end of the tenure and earn an interest of 2% flat p.a. (3.5% APY). The Rang De credit can be used to fund other borrower’s loan requirement.
Are the details on the borrower profile and the application details exactly the same?
We receive application forms that are KYC (Know Your Customer) compliant. The data on the application form is used to create profiles for the borrowers and uploaded on to the website. The profiles represent the data on the application form.
How long does Rang De take to do the screening?
We aim to process the application forms on a priority. They are screened and uploaded on www.rangde.org within 72 hours of receiving them from the impact partners.
Where are Rang De's borrowers located?
Rang De's borrowers are from underserved communities across India. Our focus is on states where a large section of the population is not included financially and need access to microcredit. A majority of the borrowers hail from remote rural areas.
Can I submit a borrower application for myself?
Currently, the first level of application screening is done by our impact partners. We do not accept loan applications from individuals.
Why are most of the listed borrowers women?
We do not have any preference for gender. It is prerogative of impact partners to identify and to work with communities of their choice. We are open to facilitating funds to men for their business needs.
Why are so many borrowers in the same occupation?
Some of the borrowers having the same occupation are members of a group of borrowers belonging to the same communities and, at times, are involved in similar activities. This is also an indicator of group homogenity. Having said that, we have facilitated funding for more than 500 different types of activities.
Why are the surnames of some borrowers the same? Are they part of the same family?
At times, the borrowers belonging to a particular community can have similar surnames and, at times, are also involved in similar businesses.
How are the borrower profiles listed on the website compiled?
We receive application forms from our impact partners that are KYC (Know Your Customer) compliant. The data on the application form is used to create profiles for the borrowers and uploaded on to the website. The profiles represent the data on the application form.
What happens in case a borrower defaults in repayments towards their Rang De loan?
If a borrower defaults on a loan due to a genuine reason (i.e. death, casualty, or a natural calamity) the loan is written off on humanitarian grounds. In case of all other instances, Rang De and its partner organisations will evaluate all possible recourses to recover the loan amount.
Borrower Application Process on the Ground
Who are the borrowers?
Borrowers of microcredit are typically people of very low income households who require working capital and credit. The donation you make as a changemaker is usually towards the working capital of an individual whose occupation could vary from farming, livestock rearing, tailoring or other micro and cottage industries, mostly run by women. You can find borrowers whom you wish to help based on specific search criteria (state and category). Alternatively you can make a quick donation where Rang De will select the borrowers.
How are the borrowers selected?
Borrowers are selected by impact partners based on their family income, their access to finance from traditional sources and other socio-economic factors. Our aim is to reach out to underserved communities, mostly first time borrowers who have never had access to microfinance before.
What are Rang De Evaluations?
Evaluations are post disbursal interactions with borrowers to understand how the loan has been utilised and the impact on the borrower. These evaluations are done by Rang De Team members.
What happens after the Evaluations?
Evaluations are very important to everyone in the Rang De ecosystem. Feedback from the evaluations is shared with the impact Partner as well as with the Rang De change makers. The impact partners are expected to work on the feedback within a given time frame and communicate this to Rang De. Stories from the evaluations are shared with the change makers via email.
What do we do with stories of not-so successful cases?
Evaluations are meant to report the reality as it is from the community. We often share stories of hope and despair with our supporters and work with our impact partners to address areas of concerns. Krishna Devi, for example, is currently saddled with debt and pays her dues to a moneylender as she repays a Rang De loan for a buffalo that could not immediately provide any milk. We communicate our feedback to our impact partners so that borrowers are not overburdened with debt and are given proper mentoring so that they can find a stable path towards a financial secure future. Evaluations help the Rang De team in deciding on future course of action and intervention.
What are the different types of evaluation that are done?
We currently perform audio evaluations as well as field evaluations that Rang De change makers can be a party to. Audio evaluations are done via phone conversations with the borrowers. Field evaluations are on the ground assessments done by Rang De team members by visiting and interacting with the borrowers. You can find our upcoming trips on our Field Trip Calendar and make a request to join us by writing in to email@example.com.
What do the evaluations include?
Rang De evaluations aim to capture information beyond the loan and its impact. It covers the following areas: Loan & loan utilisation, Impact of the loan, Financial Literacy of the Borrower, Loan Process & Compliance, Degree of Indebtedness, Feedback on the Loan Representative and Feedback on the impact Partner. Evaluation reports are shared with Rang De impact partners for them to take appropriate action and a summarised report is shared with Rang De change makers via emails.
Rang De's Impact partners
What is a impact Partner?
Impact partners are registered non-profit organisations or non-profit microfinance institutions that work with underserved communities. With their partnership with Rang De, they are able to help reduce poverty and improve the quality of life of the communities.
Why do we need impact partners?
We work through a network of impact partners identified after a thorough due diligence process. We do not lend to individuals or groups directly. Our impact partners identify borrowers from communities they work with. The impact partners are credible grass root level organisations and are responsible for identification of borrowers, disbursement of loans, collection of repayments. The impact partners also help us during the impact assessment visits by Rang De team members, volunteers or changemakers like yourself.
Why do impact partners get a big portion of the interest?
Our impact partners are responsible for identification of borrowers, disbursement of loans and the collection of repayments. The impact partners also help us during the impact assessment visits by Rang De team members, volunteers or Rang De change makers like you. Impact partners incur significant expenses ensuring the success of the Rang De model and the 5.5% is just enough to manage these costs.
What is APR?
APR (Annual Percentage Rate) refers to the interest rate on a loan that is calculated on an annual basis. A borrower will effectively pay interest on a loan that is equivalent to the APR i.e if a loan of Rs. 1000 is taken over a year, the interest to be paid is Rs. 100 in the case of flat interest. However, as the borrower makes each repayment, the loan amount is reducing which means that the interest amount should reduce too. This reduction is not included in a flat interest rate. Hence, the flat rate is recalculated to give an APR. Rang De's borrowers pay an interest of 17.97% APR (10.0% flat p.a. or 17.97% APR) which is considerably lower than the APRs of other MFIs world-over.
What is a flat interest rate?
A flat interest rate refers to the interest rate a borrower has to pay on a loan if they pay it at the end of the repayment period. Rang De charges its borrowers a flat interest rate of 10.0% flat p.a. (17.97% APR) i.e. for a loan of Rs. 1000 taken over a year, the amount the borrower has to pay is Rs. 1100 (Rs. 1000 for the loan and Rs. 100 as interest) divided equally over each repayment period (monthly, weekly, quarterly).
What are the Impact Partner's responsibilities?
- The Impact Partner will act as a guarantor for the loans facilitated to its employees by Rang De.
- The Impact Partner should ensure that loans are facilitated only to the eligible candidates and to undertake proper due diligence as is done in case of other loans facilitated through Rang De.
- The Impact Partner will ensure timely remittance of repayments to Rang De.
What is Nomination?
Nomination is a facility that enables a Rang De change maker to nominate an individual, who can take decisions pertaining to the credit in a Rang De account post the demise of the original change maker.
What is the benefit of nomination?
In the event of the death of a change maker, Rang De can release the account/credit without insisting upon a Succession Certificate, Letter of Administration or Court Order.
Who can nominate?
A nomination can be made only in respect of a Rang De account which is held in the individual capacity of a Rang De Changemaker and not in any representative capacity such as the holder of an office like a Director of a Company, Secretary of an Association, partner of a firm, or Karta of an HUF.
How can I get a nomination form?
Please click here
Who can I nominate?
There can be only one nominee for one Rang De Account and the nominee must be an individual.
Can I nominate a minor?
Yes, nomination favouring a minor is permitted on the condition that the change maker, while making the nomination, appoints another individual as a guardian, other than the holders in the account.
What are the basic guidelines to be followed while completing a nomination form?
- The form needs to be complete and duly signed by a Rang De change maker.
- The Change maker ID number of the Rang De account that is being nominated must be specifically mentioned in the nomination forms.
- The Change maker has to submit his/her photo ID along with the signed form. (List of documents)
- If a minor is being nominated on the account, minor's Date of Birth (DOB) is mandatory along with complete details of the guardian, with necessary signatures of the guardian appointed.
Does the nomination have to be witnessed?
The signatures of the Rang De change maker need to be attested by two witnesses.
Can I cancel or change the nomination that I made earlier?
Cancellation or changes in the nomination can be made at any time as long as the account is in force. While making a nomination, cancellation or variation, rules applicable to attestation by witnesses need to be followed.
How can a nominee claim the contributions made towards Rang De?
In the event of the death of a Rang De change maker, the nominee should contact Rang De, along with his/her photo ID proof and he/she will be guided accordingly.
What would happen if no nomination is made for my Rang De account?
In case you have not made any nomination, your Rang De account would be transmitted to the account of legal heir(s), as may be determined by an order of the competent court.
How do I leave the available credit for funding other Rang De borrowers?
A Change maker can also leave the credit available to be continuously contributed in Rang De’s borrowers. Kindly write to us expressing your wish to do the same at firstname.lastname@example.org.
Why does the website look different?
From the 4th of January 2018, www.rangde.org is a donations-only platform where Rang De change makers can use their donation amount as a personal revolving fund wherein they can fund the loan requirements of the borrowers listed on the platform.
The most important change to keep in mind is that any repayments received from borrowers funded post 4th January cannot be withdrawn and can only be re-used to support more borrowers.
This change has been brought in light of the regulations issued by the Reserve Bank of India in October 2017 that mandates that only a company with a NBFC P2P licence can carry out peer-to-peer lending activities in India. Existing peer-to-peer lending platforms were given three months to comply with the deadline for compliance being 4th January 2018. Rang De Trust is registered as a charitable trust and thus cannot carry out peer to peer lending activities (where investors get their principal amount back along with an interest). The website has been modified accordingly to reflect these changes.
What happens to the investments I made before January 4th 2018?
For existing supporters of Rang De who have made social investments before 4th of January 2018 there are two options available a) Conversion of existing Rang De credit (and future credit) into donations b) Withdraw existing Rang De credit into an Indian or NRO bank account.
If you opt for the conversion to donation option today you will be effectively telling Rang De to treat your existing Rang De credit and future receivables into donations that you can then use as a revolving fund to support other borrowers.
If you choose the withdraw option you would have to provide Rang De the details of an Indian bank account or an NRO account into which you would like to withdraw the money. As the borrower repays his or her loan the credit would accumulate in your Rang De account as per the repayment schedule of the original loan and from time to time Rang De would transfer this amount into the bank account whose details you provided. For instance, if you supported a borrower whose loan gets repaid in full by October 2018, you would be able to withdraw your money in full only by October 2018 provided the borrower sticks to the original repayment schedule.
Is a partial conversion of Rang De credit into donations possible?
No. Conversion of existing Rang De credit (and future receivables) into donations is only possible in entirety.
Would I receive an 80G if I convert my old investments into donations today?
80G can only be issued for those who choose to do the conversion and had made their first social investment in the financial year 2017-18,. For the older social investors, due to the complications arising from accounting purposes the conversion to donations can be done without issuance of an 80G certificate.
Is the interest income I receive on my earlier investments taxable?
Yes. If you choose to withdraw your investments into your bank account you would have to declare the interest received on your earlier investments when you file your tax returns for the relevant financial period.
What are the implications of the changes on the borrowers that Rang De works with?
For the borrowers there are no changes in terms of their relationship with Rang De or the impact partner. They will continue to receive micro loans at the same interest rates that they will have to repay with the same levels of discipline and rigour.
However, the loan agreement that a borrower will now sign will be between Rang De, and the borrower unlike previously where Rang De and the partner acted as agents on behalf of the social investors.