Ramesh Kumar


This profile was prepared when Ramesh Kumar was elected to the Ashoka Fellowship in .
The New Idea
Ramesh is building fostering an ecosystem that finances high quality homes for disenfranchised rural families while keeping the costs of the financing system low. He is doing this by rethinking the entire housing financing system to best serve rural populations. The long-term nature of mortgages is a large impediment to access for rural households as they are typically only able to predict their income in the short term. Ramesh is initiating a subsequent way of construction. This would be through a series of shorter term loans that would finance different modules of the house. The shorter term loans would enable different parts of the house to be built over a suitable period of time.

To access the credit history of rural householders he has adjusted the Grameen bank group based microfinance system to the housing system. He lends to rural householders who are part of existing self-help groups (SHGs) with a strong history of repayment consisting of least two or three cycles of repayment. He is empowering existing self-help groups in partnership with NGOs to improve their living conditions through training in sanitation and hygiene, thereby strengthening the capacity of SHGs for the long term.

To issue these loans Ramesh is working to get the buy-in of regulators to accept an alternate means to assess collateral and credit history of rural population. This is by creating a paralegal mortgage backed up by the self-help group members the recipient is part of, and approved by the village Panchayat (local government). To identify suitable recipients and scale his work, he partners with micro-finance institutions. They must go through an extensive vetting process and must already have a deep and on-going relationship with a community.

Ramesh is opening up a new marketplace for housing microfinance and building investor confidence by proving the financial viability of his model, so that other public and private finance institutions also build housing microfinance services for this area.
The Problem
The Strategy
The Person

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