Download - Microfinance: Challenges and Opportunities
Microfinance: Challenges and Opportunities
Geoff DavisPresident and CEO
Unitus
Overview
1. Global Poverty: Problem or Opportunity?
2. Microfinance 101 & 201
3. Unitus
4. Microfinance 301
5. Conclusion
POVERTY“The Root”
HUNGER
POPULATIONPRESSURE
DISEASE
ENVIRONMENTALDESTRUCTION
TERRORISM
Social Problems
Three Billion in Poverty: Problem or Opportunity?
Opportunity Mindset• Untapped markets• Need for innovation• Investment potential• Human potential,
waiting to be unleashed
Problem Mindset• Scarcity• Need for Charity• Government
intervention• Helpless victims
100% NON-PROFIT 100% FOR-PROFIT
Social Enterprise
Socially Responsible Business
Cause-Related Marketing
Venture Philanthropy
A New World
A Paradigm Shift!
Microfinance 101 : Overview
5 Facts
• $100 - $500 “productive” loans
• Group liability
• 95% repayment globally
• Mostly women
• It works!
Microfinance 201 : Problem Statement
5 Problems/opportunities
1. 10,000 MFIs worldwide
2. 2% reach >100,000 clients 68% reach <2,500
3. Industry growing ~15% p.a.
4. 400,000 families lack access
5. It’s growing slowly and not reaching its potential
So We Created Unitus
• Unitus = Unite + Us
• Attacking two core structural problems:– Changing the historic MFI growth curve– Shifting from “Donor Based” model to
“Capital Markets” model
• Using Proven and Relevant Practices– Venture Capital– Banking– Strategic Consulting Services
Bringing Innovation to Microfinance
Unitus Equity Fund• One of the largest global equity funds in the
microfinance industry to be funded with private capital
Unitus Solutions• Technology• HR
Unitus Capital Markets• Identifying new ways of connecting
microfinance institutions to sources of capital
It Works! Results from Unitus MFI Partners
• December 2002
– 1 partner serving 2,566 clients
• June 2007
– 16 partners serving 1.9 million+ clients across 6 countries
– 1,400,000+ clients added over life of Unitus partnership
– In 2006, Unitus partners grew 8x faster than industry peers
SKS India
An Example…
SKS Results: 750,000 Clients in 4 years
Inputs:• Venture Capital
– Transformation to regulated for-profit institution in 2005
– 30% equity in new company
• Investment banking– $4m line of credit– Spurred access to local capital markets
through catalytic debt
• Strategy Consulting– Raised 5 yr growth targets 100k – 425k– Assisted with CEO and CFO hiring– Efficiency innovation project– Guided implementation of monthly
reporting tool
Microfinance 301 : Looking ahead
5 Trends
• For-profit MFIs
• Commercial investors
• Capital markets
• Ecosystem
• Other products and services
EconomicEmpowerment
“The Root”
EDUCATION
SUSTAINABILITY
HEALTH
ENVIRONMENTALPROTECTION
PEACE
Our World’s Potential
Thank you!