Our commitment is to ensure a fair deal for social investors as well as borrowers . While we work hard with our field partners to ensure that there is no exploitation of borrowers, we strive equally hard to make sure that RangDe.Org as a platform is transparent and trust worthy. Our feedback and updates from the field will speak the reality and we will try our best to ensure that we report facts from the ground.

Why do we make a distinction between delayed payments and defaults?

During our interaction with borrowers we learnt that there are times when things are exceptionally difficult for the borrowers.T his could be due to emergencies, high expenses or a bad month for business. This is not unique to the borrowers. It is a harsh reality of life that we are all exposed to. In order to ensure that the borrower is not exploited and is not under undue pressure to repay at times of distress, we make a clear distinction between delayed payments and defaults.
A payment is considered 'delayed ' when a borrower is not able to pay the installments according to the repayment schedule for 3 consecutive months.

What do we do in case of such delays?

Rang De's field partner is mandated to inform Rang De of any such delays along with the reasons for such delays. This will be communicated to Rang De at the time of sending repayment reports. When such delays are communicated by the field partner, Rang De will closely track the repayments for the next 2 months and if delays spill over to the third month, the social investor is intimated through an e-mail.

Communication to the social investor

Rang De and the concerned field partner will be responsible for communicating delays and reasons for the delay to social investors. The social investors can request for more information on the same.

What is a default?

Any borrower whose repayments have been due for three consecutive months will be termed a default. We categorise default into genuine defaults and willful defaults. When a borrower has not been able to pay due to a genuine reason such as an emergency, natural calamity or strong personal reason and has been verified by Rang De and the field partner will be categorised as a genuine default. A willful default is when borrowers do not repay the loan and there is an absence of reason for the default.

The Rang De Contingency Fund

From the beginning of April 2009, 0.5% of what the borrower pays as interest is set aside towards contingency fund. The contingency fund will be used to cover up defaults on proportionate basis and will cover loans in which interest has been set aside towards this fund. The calculation of the proportion of default to be met out of this fund will be as under:
Default Coverage = [ Principal Defaulted x Contingency Fund Value (as on date of last default) ] % Total outstanding loan (as on date of last default) The default coverage will be shared by the social investors in proportion to their share in the investment.