1

Ujjivan Financial Services An Urban Microfinance Institution February 15th 2008.

2

Microfinance a panacea for poverty alleviation?Impact evaluation of Microfinance in Andhra

50% +30% 020% -

EducationHealthcareBasic Infrastructure

3

Microfinance

Major tool for poverty alleviationUrban poor household average borrowing

Rs.50K frpm multiple sourcesServicing debt one of the biggest items on

the income statement of the poor.

4

Can Microfinance exist without revolutionary cost saving?MFI Cost Structure:

Borrowing Cost- 12%Operating Cost- 10%Bad Debts &Return on Capital- 2%

Lending Rate- 24%Borrowing Cost- Regulatory IssueOperating Cost- Process & Technology

5

Microfinance - Technology

Back-end: Homegrown-not robust Cut & Paste banking software

solution-expensiveFront-end: Experimental – Handheld devices &

mobile phonesCommunications: Issue for remote rural areas

6

New Frontier 600 million working poor in the next 20 years

for financial institutions & IT service providers. New Solutions taking advantage in the

tremendous advances in technology in the last two decades.

1. Back-end – Robust systems which can handle very large volumes in cost effective manner.

2. Solutions which reduce depence on cash.3. Solutions which take advantage of the great

leaps in communication technology.

7

The Prize

Those who are able effectively serve the 600 million working poor will be the new leaders of the financial service industry in the next 20 years.

Remember: Hindustan Levers sells 70% of shampoos today in sachets.

8

Thank you very much for your time and interest!

Thank you very much for your interest and time.

Samit Ghosh

www.ujjivan.com