Launching India’s first urban rental/lease housing microfinance product!

Today was an exciting day. After several months of field research, interviews, revision after revision of product details, weeks of training branch and head office staff, and countless documentation edits, we launched India’s first urban rental/lease housing microfinance product along with a house improvement microfinance product today in Koramangala, one of Bangalore’s poorest slum areas.

The products, with loan sizes ranging from Rs. 10,000 to Rs. 30,000, will allow low-income working women in Bangalore to borrow money to pay for rental deposits, house improvements, or lease amounts (Leases are a type of housing scheme in India where a tenant pays a large sum of money upfront for a period which covers them for 1-5 years. They do not have to pay a monthly rent and receive the lump-sum back at the end of the period, thus allowing the landlord to live off the investments she makes with the lease amount). In the past, the majority of women borrowed from high-cost moneylenders or pawnbrokers who charge up to 10% per month in interest to pay for housing costs, but our products will allow them to borrow at 1-1.25% per month with no collateral other than the joint liability guarantee from their 4 other group members.

There was no celebration or fanfare for the launch, but I cannot describe how exciting it was to sit at a center meeting and watch the lively discussion that unfolded as the field staff member described the products to a group of customers. Of course, the discussion took place in Kannada so I couldn’t understand much, but I think that was what was so amazing about it. The product started off as me and others brainstorming ideas and talking about them with other employees and investors months ago, but today here it was – the subject of a loud and enthusiastic discussion in the local language of our customers in the heart of the Bangalore slums.

There were two eligible customers in the center – customers become eligible for the products by demonstrating good performance over the past 12 months – and I was thrilled when one of them, Valli, a housemaid and mother of two, raised her hand and said that she was interested in taking the loan. I looked on as Yellamma (our field staff member in charge of executing the products at the Koramangala branch) followed all of the procedures precisely as we discussed in our various training sessions and filled out Valli’s loan application. There are still many steps to finish before Valli gets the Rs. 20,000 lease amount loan she requested, but this first step was for me (and probably her as well) enough to make me feel proud and excited for what this product can and will become for our customers.

Updates on the products to come!

As a side note: I am happy for the new Bears enjoying the award-winning gourmet DCs, but why couldn’t this have happened 4 years ago?

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A.B.

Listening to: Buddha Bar IV
Reading: I need to pick a new book to read!