Scaling Up Micro Lending in California

1. Scaling Up Micro Lending in California Disruptive Technology

2. Morning Agenda • Welcome: Lena Robinson • Paradigm Changes: Stanford Microfinance • New Players Panel • Bankers Panel • Lunch at noon • Lunch Keynote: Barbara Vohryzek

3. Disruptive Technology An innovation that creates a new market and value network, and eventually goes on to disrupt an existing market, displacing an earlier technology.

4. Disruptive Technology The term describes innovations that improve a product or service in ways that the market does not expect. Legacy organizations can miss the value of a disruptive technology, only to be left behind as the new technology matures and takes hold.

5. Technologies • Big data and behavioral algorithms • Automated data access & assessment • Cloud-based technology & programming • Online processes • Mobile technology

6. Changing Norms New technology is not just putting traditional lending processes online. New technology is changing lending norms. • What’s offered • On what criteria • To whom • How delivered • How quickly • At what price • By whom • How restructured

7. Impact on Microlending • Sophisticated technology available to smaller companies • Technology is changing the profitability of microlending • Bringing new players into the market • Creating new forces, like crowdfunding • Raising new expectations among borrowers

8. Rapid Expansion • ‘New-paradigm loans’ widely available • Taking hold in the market rapidly

9. Stanford Micro Finance Group Big Data Meets Micro Finance Online Microlending, Machine Learning and Changing the Market • Luis Armona • Julia Reichelstein

10. New Players Panel • Tom Green, Lending Club • Brad Lensing, Prosper • Leslie Payne, Lend Up • Paul Quintero, Accion East

11. New Players Questions • What loan products are you offering? • What is your market, and how do you reach it? • What is your application process? What information do you require? • How do you assess clients? • What technologies are you using for marketing, document collection, underwriting and servicing? • How quickly can you fund a deal? • What is your current volume?

12. Banker Panel Moderator: Barbara Vohryzek, Governor’s Small Business Advocate • Fred Mendez Rabobank • Lena Robinson Federal Reserve Bank of San Francisco • Herman White San Francisco Fire Credit Union

13. Afternoon Agenda - Members • Lending Academy • Member Panel Devon Johnson, Women’s Economic Ventures Naldo Peliks, Centro Community Partners • Breakouts • Group Discussion and Survey

14. CAMEO MicroLending Academy Goals Increase microlending, capacity, technology adoption and access to capital. Features: • E-newsletter • Peer Learning • Training • Individual Consulting • Professional Development • Technology Support

15. Women’s Economic Ventures • Devon Johnson • Microloan Management System (MMS)

16. MMS Supports lending here Risk Assessment Outreach Underwriting Closing Application Document Collection Credit Memo Servicing & Collections

17. WEV’s Experience • Doubled deal capacity • Quicker, clearer decisions • Saving time: less upfront admin/touch files less • Invest time after client gives basic info • Time spent on more viable prospects • Could expand with less experienced employee

18. WEV’s Experience • Not trying to duplicate our previous process • Stepping into MMS: Investing time to understand rationale for particulars, especially required docs, loan amount and underwriting • Giving it a year

19. Centro Community Partners • NaldoPeliks • Business Toolkit Presentation

20. Quick Dyads and Group Discussion Find someone who is not in your organization. • What response to these trends should our industry be considering? • What strategic steps could my organization take? • Is there a role for CAMEO to support members adapting to new lending environment?

21. Closing • Wrap up from Claudia Viek • Please complete your survey • MMS detailed Q&A available after closing

22. Thanks!!