History – The Founding Team’s Journey

The founding team’s journey in facilitating financial Inclusion started in 2004 when it commenced facilitating formation of Self-help Groups (SHG) as Sornammal Education Trust (SET) to promote livelihood opportunities for lower income households (‘Project Sornam’). Wherever possible, groups have been linked to banks for credit to enhance their livelihoods. SET itself was started as a Social Initiative of the promoters of MaFoi Management Consultants Limited in 1996 and was involved in various activities including the management of a school in Ayanavaram, Chennai. SET is recognised by Tamil Nadu Women Development Corporation.

Between 2004 and 2012, SET grew from strength to strength and had 12 branches in 3 districts of Tamil Nadu, promoting close to 3900 SHGs with around ~59,000 members, who have availed over INR 100 crore in credit. SET has been associated with over 10 banks. During all this, SET has been able to ensure the highest credit quality and thus, all loans facilitated by it have been promptly and fully repaid by beneficiaries. SET has received an award from ICICI Bank achieving the highest volume of credit under the ICICI NGO Partnership Model while ensuring 100% recovery.

A primary distinction in approach at SET has been recognising that focussing only on commercial activities is not sufficient. There was a strong emphasis on a discerning human touch. SET Employees maintained a strong client connect and were able to understand clients’ circumstances while dealing with them on the commercial front.

While the SHG program has been successful, it was not possible to make it commercially sustainable and scalable. The promoters were convinced about the positive impact of credit and were confident in their ability to manage client and funder expectations while building a robust organisation that will accelerate impact. ‘Varam’ is the vehicle they chose to give wings to this desire.

Varam Capital Private Limited (formerly Karpaga Ganapathi Investments Private Limited) was hence acquired in 2011 and since September 2011 has been providing enhanced credit to groups with higher potential.

Varam is now prepared to emerge as a distinct entity with a clear and focussed objective of providing comprehensive and innovative microfinance solutions to clients in low income households.