Until two years ago, each time Ponnumani Palanivel, a mentally challenged 19-year-old woman in Tamil Nadu’s Musiri village, wanted to use the bathroom, she waited until either her mother Sivakami, a wage labourer, or her father, a loader at construction sites, came home. They escorted her outdoors because their 250 sq ft house in Tiruchirapalli district had no attached toilet.
Finally, in November 2009, Ponnumani’s father approached Guardian Micro-Finance Institute, a non-profit that provides money and logistical help for toilet construction in rural India. At around the same time, Bangalore-based Milaap, then a new online micro-finance company, approached the non-profit group to help it find a borrower for Rs 10,000.
Eventually, a month later, Palanivel constructed a toilet with Milaap’s money and Guardian Micro-Finance Institute’s assistance. “It’s gratifying when your efforts show results,” says Anoj Viswanathan, 24, one of Milaap’s two founders, whose ideas about social entrepreneurship took shape when he worked in 2008 as an unpaid intern at a micro-finance company in Orissa.
“I had taken the year off to figure out what I wanted to do,” says Viswanathan, 24, who was then studying mechanical engineering at the National University of Singapore. “I knew I didn’t want to be an investment banker.”
Sourabh Sharma, 29, his partner and classmate, was drawn to micro-finance because he himself had benefited from an education loan. “My parents couldn’t afford an international university,” he says. So although he began his career by setting up a firm that made mobile applications, he sold it and joined hands with Viswanathan to start Milaap. “Beyond a point, how many photo-sharing applications can you make?” he asks.
Across India, the number of entrepreneur like Viswanathan and Sharma setting up businesses that serve the socially disadvantaged sector is rising. “As a society, we are averse to risk, and this is higher in the social sector,” says Shashank Rastogi, director of operations at the Indian Institute of Management’s Centre for Innovation Incubation and Entrepreneurship in Ahmedabad, set up in 2002. “But with the economy growing, this is changing.” It has funded 50 projects after 2008, up from 10 before that.
Last week, Muhammad Yunus, founder of the Grameen Bank in Bangladesh, said he had tied up with Rastogi’s centre to fund social entrepreneurs. He plans to begin by setting up a Rs 50 crore corpus for such projects.
Globally, so-called “impact investing”, whose focus is the social sector, is expected to grow to $1 trillion by 2015, from an estimated $400 billion now, said a study by JP Morgan and the Rockefeller Foundation in November 2010.
Milaap has already lent Rs 1 crore to 800 families in Karnataka, Tamil Nadu, West Bengal and Maharashtra. Its portal allows people to lend Rs 1,000 or more to borrowers it lists.
Lenders will get the principal, not the interest, which Milaap splits between itself and its partner, such as Guardian. And people like Palanivel live with more dignity than before.