MicroGraam Education Fund

8/2/2019 MicroGraam Education Fund

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Fund Summary

Investment ObjectiveInvest funds in loans towards college education and employability training for poor

youth in rural India. Target fund size is Rs. 10 crores.

ReturnsThe fund is structured as a debt product (direct lending to youth) with 24 month

term earning an interest of 8% APR.

Risk

Regardless of default by borrowers, the fund guarantees return of principal investedthrough first loss and second loss coverage by guarantors. In case of default, only

the interest is at risk.



R ural youth have difficulty affording college fees

Typical fees for diploma courses or bachelors degreein semi-urban India are Rs. 25,000 Rs. 50,000 per year

R ural students have no access to credit to help pay for education

Banks pose complex loan terms and collateral requirements, as well as cumbersomeapplication and disbursement process

Money lenders charge high interest rates

Degree-holding rural youth are often unemployable64% of employers in India are not satisfied or only somewhat satisfied with

problem-solving, analytical and behaviorial soft-skills of rural graduatesA simple solution is a short employability training program, costing Rs. 15,000

World Bank, Policy Research Working Paper #5640 Employability and Skill Set of Newly Graduated Engineers in India, April 2011



The availability of

can change the financial trajectory of rural youth

small amounts of credit at the right time

and their families



MicroGraam Education Fund

MicroGraam has created the MicroGraam Education Fund a mechanism for rural

students to obtain loans through urban investors.

Our partners identify meritorious and credit-worthy students and recent graduates

who need help with paying for education and/or employability training.

Our partners:

Grameen Koota, an organization with 12 years of experience in microfinance, for

facilitating education loans for engineering students.

Vidya Poshak, an NGO with 10 years of experience in working with rural youth, for

conducting trainings and job placement services for rural youth.



Who are the borrowers?

Meet Amol

Amol earned a B.Com degree but was unemployed.

He came to know of an employability training cum placement program

but needed Rs. 15,000 for fees.

MicroGraam helped Amol obtain the loan through an investor.

In training, Amol learned typing, English communication and other

soft-skills.

Amol now earns Rs. 11,500 per month and is paying back the loan.

He sends almost Rs. 6000 home every month.

Amol·s story is not uniqueThere is tremendous unmet demand in small town and rural India

for loans for college education and for employability training



100% placement rate to-date

MicroGraams field partner, Vidya Poshak, works with regionalemployers for interviewing and placement of trained

graduates. Typical starting salaries range from Rs. 8.000 to

11,000 per month.

Training

Communication: Conversational English, English Grammar,Accent, Voice Modulation, Business Writing, Report Writing,

Computer Skills: Microsoft Word, PowerPoint, Excel,

Internet search, email, etc.

Analytical and behavioral: Analytical skills, problem solving,

confidence, time management, team work, interpersonal skills,etiquette



A company of many firsts!

MicroGraam was the first to offer microcredit for education in India

MicroGraam was the first to offer a peer to peer lending platform in India, where

investors could not only choose specific individuals but also the interest rate

MicroGraam was the first to offer interest on loans given

And now, MicroGraam is the first to offer Investment Funds focused on rural lending

And, Loan Principle Guarantee for investors in the Education Fund



Borrower

1

Borrower

2Field

Partner(NGO or

MFI)

MicroGraamEducation Fund

Investor

1

Investor

2

Guarantor(s)

Provide Second Loss

Default Guarantee

Provide First

Loss Default

Guarantee

Investor

3

Investor

Loan principal guarantee mechanism

Borrower

3

Borrower

Borrower



Our vision for the Education Fund

Empower youth in rural India with right education and training needed to

build a respectable career and life of prosperity

Our goal is to create a robust peer-to-peer microcredit market for educationin India and to reach 10,000 rural youths by 2015



Who we are: The founders

Sekhar Sarukkai was recently voted a Top 25 Chief Technology Officer by

Information Week. He is a successful serial entrepreneur. The last two companies

he founded were acquired by Cisco Systems and Oracle. Sekhar, who holds a Ph.D.

in computer science from Indiana University, is based in the Silicon Valley and has

a passion for applying technology to better humanity.

Rangan Varadan brings extensive experience in financial services domain. His

current focus is on taking branchless banking services to villages in the most

efficient manner through technology and field partnerships. Previously he headed

the Banking and Capital Markets technology research group at Infosys

Technologies. Rangan holds a Ph.D. in finance and economics from Lehigh

University, and is also a fellow of the Institute of Chartered Accountants of India.



³It is very easy to get a loan from Micrograam´

³Flexible financial services to meet the needs of small

farmers by extending the grace period before loan

repayment starts, « and offering seasonal loans with

lump-sum repayment after harvest.´

³MicroGraam opens doors for small investors thru

online lending´

May 2010

MicroGraam, µe-bay¶ of microfinance, launches online

marketplace´

Oct 2010

Mar 2010

CNBC-TV18 and YourStory.in 2010 Award for Excellence in Sociopreneurship

IIM Lucknow Prerna Award, 2010for Social Entrepreneurship

Business Today, July 2010



Amol, employability training

graduate, in his own words

Francis, who doubled her

business income through a loan

Click image to launch YouTube video

or click here

Click image to launch YouTube video

or click here



MicroGraam investment products:

MicroGraam Education Fund for college or employability training program fees

MicroGraam Agronomy Fund for farm productivity improvement through training and equipment

Online Education loans where you choose specific borrowers and interest rates

Online Micro-enterprise loans where you choose specific borrowers and interest rates

MicroGraam has been helping rural graduates get employability training by

helping them obtain loans from urban professionals.

Investments to-date R s. 1.06 croresNo. of loans to date 724 (as of 31 October 2011)

Repayment rate for all loans 97% (as of 31 October 2011)



For MicroGraam Investment Funds, MicroGraam has partnered with

Guarantors who provide first and second loss default guarantee covering

100% default on principal, leaving only the interest payments at risk.

In case of borrower default, investors will receive full repayment of principal

amount invested at completion of term but not the interest.

Repayment rate for all MicroGraam loans was 97% as of October 2011.

Loans face risk of non-payment due to several reasons including, natural

disasters, unfavorable weather (for agricultural loans), family emergencies,and default by borrowers or field partners.

R isk of loan default



Why donate once,

when you can loan

the same funds again

and again?

www.micrograam.com

MicroGraam Education Fund

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Transcript of MicroGraam Education Fund