The Reserve Bank of India has made it mandatory that the aggregate exposure by an investor across all Peer to Peer Lending Platforms should be less than or equal to Rs. 10,00,000 and
the total exposure of a lender to a single borrower should be less than or equal to Rs. 50,000.

Success Story of Kariyamma

Aladagri (North Karnataka): The distance between Kariyama's old cottage and her upcoming concrete house is not more than four yards, but her shift is generational. Most of the population in this North Karnataka village lives below poverty line (BPL), a bench mark set by government of India to define people who have an income of less than $ 1.25 day. According 2010 World Bank report 32.7% people in India are BPL. Kariyama and her husband are agricultural laborers and previously their earnings would come from toiling the fields and taking the live stock of others for grazing.   Her decision and the faith shown by MicroGraam in her have changed her fortunes. From the central to the north in this southern state of India otherwise known for housing some of the biggest IT firms of the world, women in villages are quietly helping their families to come out from the clutches of the poverty.  

Aladagri is a picturesque village. Next to the green cotton and corn fields are modern windmills, mounted on small hills to generating electricity. According to a local social activist some share of electricity goes to these villages. With the good monsoons rains this year, villages in this belt look greener and ready to harvest a bumper crop. People apparently seem happy. But that has not been always the case. Many villages in North Karnataka still depend on monsoon rains for agriculture. In 2003 with insufficient rains, situation was a bad one and sometimes turned desperate. "I feel very confident and my kids can go to school now. They no-longer have to worry about their next meal," says Kariyamma.  

A couple of years back, she took a loan of Rs 50,000 from MicroGraam, a micro-lending platform where an investor selects a borrower and lends him/her anything between Rs 5000 to 50000. Kariyama is in her mid 30s. The sunburns have left deep marks over her otherwise a soothing round face, sharp features like a straight nose, broad lips and deep brown eyes. But the long years of poverty and difficult village life makes her look way older. She is illiterate and has no record of her date of birth. She is a shy woman, but very strong minded always ready to defend and pursue her case. She speaks in a gentle tone and prefers to listen unless feels the men in her village or the group may end the advantage she has now.

She still lives in her shack, the walls and roof of which is made of bushes, fallen tea branches, empty cement bags and rustic iron sheets. With the loan from MicroGraam she brought a herd of 12 goats and started the monthly payback installments by selling calcium extracted from the rocks in her village. Now after trading her first stock, she still has a herd of 20 goats, which is roughly worth Rs 1.20 lakh. With the earnings Kariyamma has started the construction for her house and has also brought some other cattle. "I am happy that my children are in school. I don't have that sense where I can ask them what they should be in life, but I just want them to get education and be what they want to be in life," says Kariyamma. Her husband Malleshappa, is shepherd by origin who has supported his wife and works with her together normally not a case in rural India where the levels of domestic violence against women are quite high.

 In 1991, economist Amartya Sen said Asia was missing 100 million women because of sex-selection and the poor attention paid to women. And according to Action Aid 2009 report, "Disappearing Daughters" in some Indian villages in North India, men-women ratio has fallen to 3/1. According to 2011 census, India has 37.25 million fewer women than men.

Founder of MicroGraam, Dr. Rangan Vardan says the micro-lending platforms and raising the skill set of women in rural India through various intervention groups give women more power and some way minimizes the effects of patriarchy. Apart from giving the extra income to the families, because of micro-lending, at many places women are in better control over their lives. Husbands do have a certain say in finances particularly where they do a venture jointly. "Micro-credit is a strong empowering tool for women," says Dr Vardan who holds a PhD from Lehigh University in finance and was previously director of banking and vertical markets at Infosys. According to Dr. Vardan just giving traditional micro-financial support to women is not enough as the capacity building and education are equally important. That's why we work with grassroots NGOs and community based groups, which are imparting education to these people. "Micro-lending is one of the main tools in India to end poverty," says Vardan. In one of the temples inside a village of Bagalkot in extreme North Karnataka where women normally gather across the religions divide, Dr Vardan's empowerment of women through these loans was very much visible.

A group of women were discussing their monthly balance and credit sheets with NGO workers when some men tried to intervene. The men were asked to shut up and they obliged quietly. Over 90% of micro-lending done by MicroGraam and the other institutions like NABARD which has a portfolio of around Rs. 500 Cr, majority of it is given to individual woman or self-help groups composed of women. Women borrowers have a better track record in terms of the utilization of the funds and the discipline, both in terms of repayment and also making a livelihood out of it, says Dr. Vardan. In socially marginalized communities gender discrimination is even higher. We work and try changing the attitudes of women to take them out from this wretchedness, said Rudramma a woman in her late 20's who is part of the NGO, Future Greens, which gives vocational training to women mostly in allied agricultural practices. As a dry and barren belt the poverty in Rudrama's village, Kalabandikeri, Bagalkot is chronic and 70% people live below poverty line. The yields from the agricultural crops are less compared to the other districts. "From three acres of land they will make just Rs 2,000 per month, which is very less compared to labor. Hardly 60% of the land is cultivable here," says Dr B R Athani, Executive Director of Future Greens which works in the dry belts of Bagalkot.  His NGO has created dozens of self-help groups.

Kariyamma has paid all her previous loans back and she seeks a fresh credit to buy the cattle and also use some of it to complete her house and on children's education. "Next time you come, we will have tea in my house," said Kariyamma as she brought tea in the small steel cups for the guests who had come to see her progress from the IT town of Bangalore.