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Village Invest: Low Cost Loans for Unbanked People in Risky Political Economies

Objective

Drawing on research from AISMA (An Anthropological Investigation of Muscular Politics in South Asia) on systematic corruption and bossism we propose to develop a proof of concept which tests the technical feasibility and commercial viability of an innovative online digital lending platform (‘Village Invest, Inc.’). The proof of concept will take place over an eighteen-month period. The pilot testing will be conducted in India. ‘Village Invest’ is a start-up social enterprise that aims to provide low cost loans to marginalised groups in risky political economies. The incapacity of the current microfinance model to reach out to these sectors has been widely recognized. Local moneylenders often remain the only option. However, they charge exorbitant interest rates, spiralling the debts across generations and making them into chronically poor or bonded labourers. What is required is an alternative lending model which uses digital technology to reach out directly to unbanked people. This direct connection lowers costs tremendously, while increasing transparency and accountability. The inability of existing online lending platforms to operate such model in countries like India, derives primarily from the lack of enabling environments: how does one replicate a direct lending system in countries with widespread cultures of unaccountability? This is the challenge that AISMA research expertise will help to untangle though the development of a risk management framework which will consist of: (1) an ethnographically driven Risk Rating Tool, to identify loan-ready borrowers; and (2) a Technical Assistance Package, to build both borrowers and communities knowledge in loan administration. If commercially viable our model will create a prototype for accountable and high impact models of social investments to be replicated across the world.

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Programme(s)

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Topic(s)

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Funding Scheme

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ERC-POC - Proof of Concept Grant

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Call for proposal

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(opens in new window) ERC-2017-PoC

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Host institution

UNIVERSITY COLLEGE LONDON
Net EU contribution

Net EU financial contribution. The sum of money that the participant receives, deducted by the EU contribution to its linked third party. It considers the distribution of the EU financial contribution between direct beneficiaries of the project and other types of participants, like third-party participants.

€ 145 926,00
Address
GOWER STREET
WC1E 6BT LONDON
United Kingdom

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Region
London Inner London — West Camden and City of London
Activity type
Higher or Secondary Education Establishments
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Total cost

The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.

€ 145 926,00

Beneficiaries (1)

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