Use your < > keys to browse more stories

Singapore, India-based microlending platform Milaap raises USD 1.1M from investors

Milaap, a Singapore-headquartered and India-based microfunding platform, announced today that it has raised a USD 1.1M venture round led by Jungle Ventures, a Singapore-based early stage fund, with backing from the government’s Technology Incubation Scheme.

Other investors in this round include Skype co-founder Toivo Annus, Singapore-based family investment office Lionrock Capital, Sony Entertainment Television co-founder and Jungle Ventures managing director Jayesh Parekh, and existing investor Unitus Seed Fund, which specializes in funding bottom-of-pyramid startups.

Jayesh, which has known the Milaap team for years, and Hari Kumar, partner of Lion Rock Capital, will join the board.

This new round is on top of the USD 250K already raised by Unitus, First Light Ventures, and New Delhi-based entrepreneurs Vijay Shekhar Shara, and Rajiv Madhok.

The social enterprise targets inhabitants living in the rural and semi-urban areas of India who are outside the formal banking system.

The company works with vetted local partners to administer loans, which have an annual interest rate of between 12 to 18%. Profiles of those in need are then published on the Milaap website to invite contributions from users in the form of microloans.

Milaap says that its interest rates are half of existing microcredit products on the market. Competing platform Kiva typically charges around 36% in annual interest and fees, while Zidisha, which does away with field partners, charges less than 10%.

It is maintaining cost competitiveness by relying on free or subsidized services through partnerships (payment gateway PayTM is one example), software automation, and hiring employees who are willing to be paid at below-corporate scales.

Since its founding in 2010 by Sourabh Sharma, Anoj Viswanathan, and Mayukh Choudary, Milaap has raised over USD 800K in loans impacting over 25,000 lives across 10 states in India. Needs include better school infrastructure, employment-linked, training for the youth, seed capital for small businesses, access to clean water & sanitation, and safe lighting for families.

The company claims that 100% of its loans are repayed, with an average loan period of 18 months. Part of its operating expenses is recouped by charging field partners about 6 percent of the interest rate on the loan amount recovered from borrowers.

It hopes to reach sustainability eventually by achieving scale and transacting larger loan volumes every month, and expand into one more country in Southeast Asia within a year.

milaap 590

More on Jungle Ventures’ activities in Asia
More on Toivo Annus’ portfolio companies



Facebook Conversation

comments