We launched lending to India last year but our experience has been that it is a lot more challenging than what we originally anticipated. Due to various bureaucratic roadblocks we are unable to send the funds over to the microfinance partner in India and we will be returning the funds we have raised.
To give additional background, the loan to a microfinance partner has to go through an approval process by the bank and the bank subsequently needs to submit an application with the Reserve Bank of India (the regulator for all banks in India). Only when the Reserve Bank of India gives what is called a Loan Registration Number can we start lending. We went through this process earlier and it took a fair amount of time.
Subsequently we learned that if there are any changes to the actual loan amount or disbursement date from what was there in the original application, the bank through whom we send the funds is insisting that the application form needs to be resubmitted to the Reserve Bank of India. The paperwork goes through the bank’s branch and then their head-office. We have been working with the bank but we are not getting any clarity on the expected completion date.
As a result we are unable to send the funds over to the microfinance partner in India. Hence we will be returning the funds we have raised from lenders for lending to entrepreneurs in India. We had put in a lot of effort to make changes to our website to support lending and this is very disappointing for us and we are sure it is even more disappointing for lenders.
Over the next few months we will explore how we can make lending work in India. Meanwhile there are more many more loans coming up from Berendina in Sri Lanka, so please do relend your funds to support Berendina in Sri Lanka where we are able to make a positive difference to people’s lives.
Thanks for your continued support.