Babyloan MFI Presentation (EN)

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Presentation of the MFI partnership with the P2P microcredit service Babyloan.org

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Babyloan MFI Presentation (EN)

  1. 1. A project by Expanding low cost funding horizons for MFIs Partnered with
  2. 2. What is Babyloan? 1 Online platform that gives MFIs access to free loans from social lenders in Europe, helping them expand their entrepreneur outreach 0. Regular MFI operations 3. Babyloan pools investments and forwards balance (New Loans less Repayments) to MFI each month 4. MFI sends monthly reports through Babyloan to update internet user on the status of their loan 1. MFI selects a number of entrepreneurs. Information on these clients is collected and entered into the Babyloan system, and is subsequently posted on the website. 2. Internet user browses Babyloan.org, chooses an entrepreneur they wish to support, and sends the loan through Babyloan to the corresponding MFI 5. At the end of the loan term, MFI forwards repayment and final report to internet user through Babyloan
  3. 3. Benefits of Babyloan partnership for MFIs 2 <ul><li>A source of refinancing to expand your outreach </li></ul><ul><ul><li>Source of low cost funds </li></ul></ul><ul><ul><li>Potential to diversify source of funds and increase profitability </li></ul></ul><ul><ul><li>Ability to tap funding potential of European public </li></ul></ul><ul><li>Increased Exposure </li></ul><ul><ul><li>Increased outreach </li></ul></ul><ul><ul><li>Enhanced international reputation </li></ul></ul><ul><ul><li>Opportunity to link with ACTED’s international network </li></ul></ul><ul><li>Open to big and small MFIs </li></ul><ul><ul><li>Open to small and big MFIs with audit history </li></ul></ul><ul><li>Internal benefits </li></ul><ul><ul><li>Free loan tracking software (Octopus) for automated data input in Babyloan </li></ul></ul><ul><ul><li>Potential for increased morale of staff </li></ul></ul>
  4. 4. Who are we? 3 Regional bank with strong mutualist identity endowed with a worldwide network <ul><li>Company providing technical, legal and commercial background to Babyloan </li></ul><ul><li>Works, through partnerships, toward the broader goal of poverty alleviation </li></ul>NGO ACTED’s supports vulnerable populations in 24 countries and is a pioneer in micro finance Cooperative bank specialized in social economy, partner of many development projects
  5. 5. Step 1. MFIs Input initial data 4 Input initial data Receive balance from Babyloan Provide simple monthly reports + <ul><li>Features </li></ul><ul><li>No change to microfinance operations </li></ul><ul><li>MFIs with Octopus </li></ul><ul><li>OCTOPUS: Free IT System LTS </li></ul><ul><li>Easy to use, reliable, free </li></ul><ul><li>Automated entrepreneur information feedback to Babyloan </li></ul><ul><li>Product features: entrepreneur information, loan tracking, accounting, reporting </li></ul><ul><li>Benefits everyday operations </li></ul><ul><li>MFIs with existing software </li></ul><ul><li>Babypus </li></ul><ul><li>Light version of OCTOPUS </li></ul><ul><li>Automated entrepreneur information feedback to Babyloan </li></ul><ul><li>Estimated 15 minutes per entrepreneur </li></ul>Entrepreneur information Entrepreneur profiles viewed by social lender via Babyloan + Short descriptive write-up (3-4 sentences) <ul><li>MFIs select entrepreneurs from their pool of existing entrepreneurs and report information. </li></ul><ul><li>Babyloan provides software (OCTOPUS or extranet) for MFIs to input data for new projects. This information is displayed to internet users. </li></ul>X Input initial data Receive balance from Babyloan Provide simple monthly reports X Input initial data Receive balance from Babyloan Provide simple monthly reports Impact measure input +
  6. 6. Step 2. MFIs Receive balance from Babyloan 5 Babyloan pools money from social investors. At the end of each month, they forward the balance (new loans less repayments) to the MFI. New Loans New Loans €30,000 Repayments on Old Loans € 12,000 € 18,000 Balance forwarded to partner € 30,000 Input initial data X Receive balance from Babyloan Provide simple monthly reports Impact measure input <ul><li>Features </li></ul><ul><li>Babyloan investors charge 0% interest on loan </li></ul>Babyloan MFI partner
  7. 7. Step 3. MFIs provide simple monthly reports <ul><li>Internet users provide loans to entrepreneurs as ‘social investments’. As such, the MFI uses Babyloan to send monthly automated updates on the entrepreneurs and their projects to internet users throughout the loan term. </li></ul><ul><li>MFIs bear the risk on entrepreneur defaults so are under no obligation to report delinquencies. However, we recommend they report any problems to enhance the authenticity of the site and potentially increase funding. </li></ul><ul><li>FEATURES </li></ul><ul><li>Reports as courtesy to social investors </li></ul><ul><li>Each month, MFIs click a button to ‘agree’ that all entrepreneurs have paid their installments </li></ul><ul><li>Less than 5 minutes to report </li></ul><ul><li>Voluntary reporting of delinquencies </li></ul>Monthly Report New entrepreneur Search entrepreneur Search Credit Contact Exit Questionnaire <ul><li>Leads to a window where loan officer: </li></ul><ul><li>Agrees all entrepreneurs have paid installments </li></ul><ul><li>Report s delinquencies </li></ul>Input initial data Receive balance from Babyloan X Provide simple monthly reports Impact measure input AGREE DELINQUENT
  8. 8. STEP 3bis. MFIs reports delinquencies 7 Benefits Increased authenticity of site Increased transparency Less automated, more customated Preformatted screen with minimal input data Better Babyloan rating of MFI if MFI dedicates time to reports Social investors feel the site is authentic and are willing to invest more Increased funds for MFI Disadvantages Time spent on identifying delinquent entrepreneur May deteriorate image of entrepreneur if defaulting on loans X Repaid X Repaid X Default Why report delinquencies? Input initial data Receive balance from Babyloan X Provide simple monthly reports Impact measure input
  9. 9. Step 4. MFIs input exit data 8 MFIs answer short exit questionnaire for entrepreneurs at the end of the loan term. <ul><li>FEATURES </li></ul><ul><li>Helps measure impact </li></ul><ul><li>Combination of qualitative and quantitative questions </li></ul><ul><li>Preformatted screen </li></ul><ul><li>Dozen questions </li></ul><ul><li>Estimated 5 minutes per entrepreneur </li></ul><ul><li>Babyloan spends information to social investors </li></ul><ul><li>Social investors may reinvest if they feel their loan had a positive impact on the life/ livelihood of the entrepreneur </li></ul>Input initial data Receive balance from Babyloan Provide simple monthly reports X Impact measure input Monthly Report New entrepreneur Search entrepreneur Search Credit Contact Exit Questionnaire
  10. 10. Minimising and easing the reporting 9 Once the initial data entry is finished, reporting is quick and easy. Load of reporting 1 2 3 4 5 6 Months Initial data input Monthly reports Impact measure input Load X Input initial data Receive balance from Babyloan X Provide simple monthly reports X Impact measure input
  11. 11. Relationship between Actors 10 MFIs General Public €€€ info INCREASED FUNDING Loan tracking software (optional) Reporting Repayment Loans (0% interest)
  12. 12. Conclusion 11 Revolutionary tool giving MFIs access to European public funding Low cost – free debt capital in exchange for information Partnership built on solid experience (ACTED, BRED, Groupe Credit Cooperatif) and trust Simplified reports 100% Repayment Entrepreneur profiles 100% Repayment 100% Loans 100% Loans Repayments with interest Loans 0% Interest Babyloan <ul><li>MFI </li></ul><ul><li>Selects entrepreneurs from existing clients and enters initial data, which is posted on Babyloan </li></ul><ul><li>Receives balance from Babyloan each month for sponsored entrepreneurs </li></ul><ul><li>Completes monthly reports and exit data for sponsored entrepreneurs </li></ul><ul><li>Repays loans via Babyloan </li></ul><ul><li>Babyloan </li></ul><ul><li>Implements internet exchange platfom between MFIs and European social investors </li></ul><ul><li>Collects & pools loans from social investors </li></ul><ul><li>Forwards balance to MFI each month </li></ul><ul><li>Sends automated monthly reports to investors </li></ul><ul><li>Forwards 100% repayment from MFI to internet users </li></ul><ul><li>Internet User </li></ul><ul><li>- Selects entrepreneur to sponsor </li></ul><ul><li>- Provides free interest loan through Babyloan </li></ul><ul><li>Receives automated updates </li></ul><ul><li>Fully repaid </li></ul>Entrepreneur
  13. 13. Contact 12 153 Boulevard Haussmann 75008 Paris – France [email_address] +33-1 42 25 83 60 +33-1 42 25 83 57 <ul><li>President ABC Microfinance Arnaud Poissonnier </li></ul><ul><li>[email_address] </li></ul><ul><li>Project manager Aurélie Marchais </li></ul><ul><li>[email_address] </li></ul><ul><li>MFI partnership officer </li></ul><ul><li>Julia Sandoval </li></ul><ul><li> [email_address] </li></ul><ul><li>ACTED </li></ul><ul><li>Frédéric Roussel </li></ul><ul><li>[email_address] </li></ul>Become Babyloan partner on www.babyloan.org

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