Microfinance: Challenges and Opportunities

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Microfinance: Challenges and Opportunities. Geoff Davis President and CEO Unitus. Overview. Global Poverty: Problem or Opportunity? Microfinance 101 & 201 Unitus Microfinance 301 Conclusion. Social Problems. POPULATION PRESSURE. ENVIRONMENTAL DESTRUCTION. DISEASE. TERRORISM. - PowerPoint PPT Presentation

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  • Microfinance: Challenges and Opportunities Geoff DavisPresident and CEO Unitus

  • Overview

    Global Poverty: Problem or Opportunity?

    Microfinance 101 & 201

    Unitus

    Microfinance 301

    Conclusion

  • POVERTYThe RootHUNGERPOPULATIONPRESSUREDISEASEENVIRONMENTALDESTRUCTIONTERRORISMSocial Problems

  • Three Billion in Poverty: Problem or Opportunity? Opportunity MindsetUntapped marketsNeed for innovationInvestment potentialHuman potential, waiting to be unleashed

    Problem MindsetScarcityNeed for CharityGovernment interventionHelpless victims

  • 100% NON-PROFIT100% FOR-PROFITSocial Enterprise Socially Responsible BusinessCause-Related Marketing Venture Philanthropy A New World

  • A Paradigm Shift!

  • Microfinance 101 : Overview5 Facts

    $100 - $500 productive loans

    Group liability

    95% repayment globally

    Mostly women

    It works!

  • Microfinance 201 : Problem Statement5 Problems/opportunities

    1. 10,000 MFIs worldwide

    2. 2% reach >100,000 clients 68% reach

  • So We Created UnitusUnitus = Unite + Us

    Attacking two core structural problems:Changing the historic MFI growth curveShifting from Donor Based model to Capital Markets model

    Using Proven and Relevant PracticesVenture CapitalBankingStrategic Consulting Services

  • Bringing Innovation to Microfinance

    Unitus Equity FundOne of the largest global equity funds in the microfinance industry to be funded with private capital

    Unitus SolutionsTechnologyHR

    Unitus Capital MarketsIdentifying new ways of connecting microfinance institutions to sources of capital

  • It Works! Results from Unitus MFI Partners December 20021 partner serving 2,566 clientsJune 200716 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 IndiaAn Example

  • SKS Results: 750,000 Clients in 4 years Inputs:Venture CapitalTransformation to regulated for-profit institution in 200530% equity in new company

    Investment banking$4m line of creditSpurred access to local capital markets through catalytic debt

    Strategy ConsultingRaised 5 yr growth targets 100k 425kAssisted with CEO and CFO hiringEfficiency innovation projectGuided implementation of monthly reporting tool

  • Microfinance 301 : Looking ahead5 Trends

    For-profit MFIs

    Commercial investors

    Capital markets

    Ecosystem

    Other products and services

  • EconomicEmpowermentThe RootEDUCATIONSUSTAINABILITYHEALTHENVIRONMENTALPROTECTIONPEACEOur Worlds Potential

  • Thank you!

  • ****640 million children do not have adequate shelter270 million children have no access to health care services

    *400 million children do not have access to safe water

    *140 million children have never been to school

    *There are many great and important issues of the day. As Ive studied the opportunities and the threats, my conclusion is that many of our deepest, most difficult social challenges has poverty as its mother or root. I am also convinced that when given an opportunity, most men and women in all corners of the world will strive not only to lift themselves out of poverty and thus improving the quality of life for their children. But that they will also feel compelled to improve the communities in which they live. Theyll cover the open sewers, thus killing the breeding ponds for mosquitos that spread Malaria and Dengue Fever. They will build schools and clinics and will do all they can to create a better future for their children. Thats why, as CEO of Unitus, Ive dedicated my life to helping as many people access these critical financial services as quickly as possible*There is a continuum of organizations in this space [Talk a little bit about the continuum, types of philanthropic activities blended value etc, corp/non-profit partnerships] *From mother theresa to Gordon Gekko there is an opportunity and an obligation to engage in the problem of poverty. Just as we are increasingly linked through globalized trade, travel and industry, we must also be linked by a globalized sense of shared destiny. The way we conduct our charity, and our business practices needs to reflect that belief.

    ***Talk about the Unitus difference here: Identifying the highest-potential microfinance organizations and helping them grow 10x their current size*Unitus Equity Fund: --One of the largest global equity funds in the microfinance industry to be funded with private capital--Closed in March with $23.4 million in committed capital; participated in SKS investment with Sequoia Capital, also in March --Investors seek a financial and a social returnUnitus Solutions:--Unitus is identifying the HR and technology solutions microfinance institutions need to grow fastUnitus Capital MarketsIdentifying new ways of connecting microfinance institutions to sources of capital

    *Unitus was started as an idea in 2000. talk about results & recent activity ****When we harness the power of the whole continuum to create economic opportunity, we begin to sow societal seeds of a different kind. [inspiration about a world w/out poverty] *A world where childrens potential can be fulfilled.*

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