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Microfinance: Challenges and Opportunities

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.

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Microfinance: Challenges and Opportunities

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  1. Microfinance: Challenges and Opportunities Geoff Davis President and CEO Unitus

  2. Overview • Global Poverty: Problem or Opportunity? • Microfinance 101 & 201 • Unitus • Microfinance 301 • Conclusion

  3. Social Problems POPULATION PRESSURE ENVIRONMENTAL DESTRUCTION DISEASE TERRORISM HUNGER POVERTY “The Root”

  4. Three Billion in Poverty: Problem or Opportunity? • Problem Mindset • Scarcity • Need for Charity • Government intervention • Helpless victims • Opportunity Mindset • Untapped markets • Need for innovation • Investment potential • Human potential, waiting to be unleashed

  5. A New World 100% NON-PROFIT 100% FOR-PROFIT Cause-Related Marketing VenturePhilanthropy SociallyResponsibleBusiness SocialEnterprise

  6. A Paradigm Shift!

  7. Microfinance 101 : Overview 5 Facts $100 - $500 “productive” loans Group liability 95% repayment globally Mostly women It works!

  8. Microfinance 201 : Problem Statement 5 Problems/opportunities 1. 10,000 MFIs worldwide 2. 2% reach >100,000 clients 68% reach <2,500 Industry growing ~15% p.a. 400,000 families lack access It’s growing slowly and not reaching its potential

  9. 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

  10. 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

  11. 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

  12. SKS India An Example…

  13. 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

  14. Microfinance 301 : Looking ahead 5 Trends For-profit MFIs Commercial investors Capital markets Ecosystem Other products and services

  15. Our World’s Potential SUSTAINABILITY ENVIRONMENTAL PROTECTION HEALTH PEACE EDUCATION Economic Empowerment “The Root”

  16. Thank you!

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