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Presentation to investor about small size loan providing organization. Startup to help SMEs in India

Presentation to investor about small size loan providing organization. Startup to help SMEs in India

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  • 1. ShubhDin “Have a good day” TEAM - 1 Bharath Lee Ravindra Vipul
  • 2. Modi: 1) 35 Year Old, Farmer in Saurashtra, Owns 4Acr Land 2) Illiterate, Not earning much mainly because of middle man 3) Urge to start side business 4) Needs capital, but does not know sources Gets an advice to go to 1) Microfinance Institute 2) Banks 3) Local Private Agencies His experience at following institutes: 1) Microfinance Institute – Don’t provide the amount of money he needs 2) Banks - Tedious process and has limited access being far from home 3) Local Private Agencies – High interest rates and short payback period Market Segment: Farmers in Saurashtra who owns static property like land or home and wants to start Agri allied business which costs in range of $2000 to $20000
  • 3. Facts  India’s population reached over 1.3 billion As per Ministry of MSME  MSME contributes 45% of manufacturing output & 40% of exports of India  Employ about 69 million persons over 26 million MSME units  50% of the MSMEs are owned by disadvantaged group of society  Key bottlenecks by MSMEs are:  Lack of finance  Marketing & Procurement  Skill Development & Training
  • 4. Demand & Market Validation  Farmers constitute at least 30% of those 26M MSME  Our market research comprised of online survey and direct calls  We got responses from customers and the results are as follows: 90 90 1 89 78 72 74 76 78 80 82 84 86 88 90 Percentage of Customers willing to use Bundle of our both Credit and BDA Services Percentage of Customers who don't have BDA Service Providers Percentage of Customers willing to use only BDA Services Percentage of Customers willing to use only Credit Services
  • 5. Customer relationship  Trusted Advisors Value Proposition  Loan amount ranging from $2000 to $20000  Door step services  Advisory Services
  • 6. Business Model Partners Financial Products Investors Relationship Manager Shubhdin Banks Business Development Services Government & Other agencies
  • 7. Revenue Model Revenues:  Interest on Loans  Processing Fee Cost Structure:  Cost of funds  Loan loss due to defaults  Admin & HR costs Revenue Range of revenue/cost Rate of interest collected from 21% - 24%  Revenue Generation customers Average revenue/cost 22% Processing fee collected Total Revenue 1% 1% 23% 8% - 10% 9% 2% - 5% 6% - 8% 3% 7% 19% Expenses Interest on Borrowings Loan loss provision Cost of operations Total Cost Profits/Loss 4%
  • 8. Capital requirements $ 2 million USD capital required Key Ratios FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 No. of Branches 2 5 8 12 17 23 29 35 No of Staff 22 52 83 126 179 245 317 395 No. of Customers Loan O/s 270 1.6 898 5.4 1,821 10.7 3,161 18.5 5,036 29.2 7,562 43.5 10,671 61.0 14,327 81.2 Operational Self Sufficiency 64.3% ROE -7.4% 100.3% 106.0% 108.7% 0.2% 6.8% 8.7% 110.2% 10.4% 111.5% 119.4% 125.3% 12.4% 22.0% 24.2%