Milaap Uses Crowdfunding to Catalyze Energy Microfinance

This study analyzes Milaap, a Bangalore-based social enterprise that deploys online lending and other innovative funding methods to fill the existing capital gap for MFIs. It tries to understand how Milaap deploys crowdfunding to channel low cost credit for investments in energy and other essential services. The study discusses the key drivers of Milaap's approach to lending: its availability, affordability, and flexibility; its engaged giving; and its democratization of lending through campaigns. Concluding with a case study on one of Milaap's field partners, the study makes a note of the lessons learned:

• Engaging with the right field partners is key. Right from the beginning, Milaap has followed a rigorous approach to selecting its MFI field partners;
• It conducts extensive due diligence and field visits that can last several weeks or even months before formally engaging in partnerships. Its unwillingness to compromise in this regard is an important reason why it continues to see repayment rates from borrowers at close to 100%;
• Milaap's core mission and competency is raising capital for MFIs, not capacity building. Realizing that access to credit does not by itself ensure energy microfinance success, it collaborated with Arc Finance to overcome this gap and provide technical assistance to borrowers.