MIT Mobile Monday Presentation

1. Your Micro-Business Partners MIT Mobile Monday Presentation November 2009

2. Executive Summary The Problem : Microfinance loans are often misused, causing borrowers to fall into a cycle of debt The Solution : Lending a franchise or a business in a box reduces this risk while providing new skills to the franchisee The Market : With high poverty rate and high mobile penetration, Indonesia is the ideal place for a mobile phone franchise What we do: We deploy business kits that enable franchisees to sell electronic airtime / “minutes” Our progress: We have created over 600 profitable franchisees What’s next: We plan on leveraging our network to deploy other services such as healthcare, education, retail, and agriculture

3. The Problem Microfinance loans are often misused, causing borrowersto fall into a cycle of debt Traditional businesses What happens after cash is disbursed? Potential problems No new skills gained Potential to fall into a cycle of debt Unnecessary interest payments Consumption Gambling, theft, etc ?

4. Lending a franchise or a business in a box reduces loan misuse while providing new skills to the franchisee The Solution Donors Microfinance Microfranchise • Donate money to sustain livelihoods • Lend money to start a business • Lend a business to generate money • Lend cash to start a business

5. 1 The Market With a high poverty incidence and high mobile penetration, Indonesia is an ideal market for a mobile phone franchise 140 million people are mobile phone subscribers 120 million out of 250 million Indonesians live with under $2 per day Operator Millions of Subscribers Incidence of Poverty in Indonesia Source: World Bank, CIA database

6. What we do Ruma deploys business kits that enable franchisees to sell electronic airtime / “minutes” CDMA phone with ability to sell electronic airtime for all 11 mobile operators in the market “Business in a Box” Promotional Banners and Flyers Operating manual, transaction log, price list, other tools *Materials provided by Bakrie Telecom

7. What we do Ruma receives revenue from the sale of the kit and airtime How it works Benefits Ruma obtains a margin for each airtime sales • Reduces the risk of misuse of funds • Borrower gains new skills • No unnecessary interest • Franchised business provides more stable income Ruma sells franchise kits 5 1 $ $ Profits used to repay loans 4 $ • MFI leases kits • Ruma trains borrower 2 Borrower sells prepaid airtime 3

8. What we do Franchisees believe that the biggest benefit is the steady cash flow to supplement their existing business • Name: Ibu Yanti • Location: Remote Area in West Java, Indonesia • Primary Business: Small convenience stand (warung) • Her story: • Ibu Yanti & her husband Pak Tisman own & operate a warung with ~20 products and vegetable stand • Ibu Yanti & Pak Tisman have a five year old daughter • The technology business delivers steadiest cash flow of all lines of business, providing ~$1/day in extra income on a consistent basis (50% overall increase) • Additional income is used to expand inventory Estimated profit* (USD / week) Week

9. How we’re doing Ruma has created over 600 profitable franchisees • Achievements • Secured funding from Grameen and Qualcomm • Created more than 600 new micro-businesses • 100% profitability for micro-business owners • 97% of micro-business owners are women • 68% of micro-business owners were below the World Bank poverty line datum of $2.50/day when they adopted the business • Priorities Moving Forward • Financial: empower 5,000 of the poor and poorest by August 2011 to reach financial sustainability as a social enterprise • Social: reach target of 70% below poverty line • Deploy new franchise product line by Q4 2010

10. What’s next We plan to deploy new business kits in Q2 2010 Education and training Trade and distribution Agriculture and fisheries Medical products & services • Sell writing utensils, books • Use the phone as interactive training tool • Provide basic information services • Build a franchised village shop • Create POS visibility • Create a mobile marketplace • Connect farmers with buyers and suppliers • Sell low availability products • Give weather information • Deliver basic medical products • Build Teledoctor service • Integrated medical alert system

11. Take aways Microfinance is a good proven tool to alleviate poverty, but it can be improved The phone is the most feasible platform to enable affordable delivery of products and services to low income households Standardizing/Franchising increases the probability that a micro-business will be profitable If you have ideas, want to help, or have money, email me at : aldi@kiva.org 1 2 3