Creating Opportunity Where It’s needed Most

ASA-OCF Lending GroupA microfinance venture in Ethiopia

Ethiopia’s potential

2013 2014 2015 2016

GDP($ bn) 43.2 45.6 49.3 51.2

GDP(Birr bn) 94.1 96.5 98.9 101.4

population 94.1 96.5 98.9 101.4

GDP Per capita 1355 1431 1522 1614

44%

20%

29%

4% 3%

Age Structure0-1415-2425-5455-6465 above

Total

Youth

Elder

0 10 20 30 40 50 60 70 80 90

83.5

77.2

6.3

Dependancy Ratio

70%Unemployment Rate

Who we are

ASA• Association for Social

Advancement • Largest MFI• In Existence Since 1978,

Headquarter Dhaka• Product: Loan Ranging from

$100 to $ 4868• Services: Education and

Training • Success rate: 99.36%

OCF• Oromia Coffee Farmer Co-

opertive• Est. 1999• Represent 102,000 farmers• Promotes standard, organic and

fair trade practices• Profit share 70:30

Joint Venture Structure

• Name: ASA-OCF Lending Partners • Customer Segment :Coffee growers of Ethiopia

Transnational strategy: • Standard global product offering • Localized loan interest rates

ASA OCF

Access to OCF network Access to ASA’s financial/non financial resources

Risk sharing Increase market share and bargaining power

Benefits

ASA- 49%

OCF – 51%

Product Details

• Category: Primary Loan• Loan Amount: Birr 1,000 - Birr 8,000($50 - $400)• Interest rate: 18-20% and 16% for population with good credit

rating• Repayment Terms: 18 and 24 months• Incremental Increase on next installment: Birr 12,000 (Max)

Positioning for Success

Regulatory Environmen

t

Local Demand

Resources Available/to

Develop

Ethiopia’s Factor

Conditions

Cost Benefit Analysis

Cost Expenses/Average assets - 16.48% (2002) to 21.34% in 2011.

Financial costs/total average assets -  2.65% in 2002 to 4.00% in 2011.

Administrative costs on total expenses - 58.02% in 2002 to 65.94% in 2011.

Growth The number of savers - 2.14M in 2002 to 4.94M in 2011.

The value of saving - $3,2178,929 in 2002 to $171,852,182 in 2011.

The number of borrowers -1.98M in 2002 to 4.36M in 2011.

Efficiency Effective yield on assets - 11.94% in 1992 to 25.13% in 2011.

ROE(Return on equity) - 2.07% in 1992 to 11.82% in 2011.

ROA(Return on assets) - 1.31% in 1992 to 7.06% in 2011.

Risk Analysis

Management Risk

Mitigation Plan• Corporate restructuring

• Cultural analysis and integration

• Incorporation of Vision an Mission at macro and micro level

Risk Analysis

corruption

Mitigation Plan• Decision making with higher management

• Employee rotation at equal interval

Exit Strategy

Sell off to the Local Competitor

OR

Spin Off and take public

OR

Close down and sell asset

Benchmark for Success

• Maintain Operational Self Sufficiency above 190% and Financial Self Sufficiency above 128% in Ethiopia

• Reach Break even Point in 2 years• Maintain

• Rate of recovery to 99.36%• Loan Ratio to 0.22 percent

• Market capitalization : 2% of Birr 13044 Mn: Growth targeted at 10%

Thank You