Ujjivan Financial Services An Urban Microfinance Institution February 15 th 2008.

Microfinance a panacea for poverty alleviation? Impact evaluation of Microfinance in Andhra 50% + 30% 0 20% - Education Healthcare Basic Infrastructure

Impact evaluation of Microfinance in Andhra

50% +

30% 0

20% -

Education

Healthcare

Basic Infrastructure

Microfinance Major tool for poverty alleviation Urban poor household average borrowing Rs.50K frpm multiple sources Servicing debt one of the biggest items on the income statement of the poor.

Major tool for poverty alleviation

Urban poor household average borrowing Rs.50K frpm multiple sources

Servicing debt one of the biggest items on the income statement of the poor.

Can Microfinance exist without revolutionary cost saving? MFI Cost Structure: Borrowing Cost- 12% Operating Cost- 10% Bad Debts & Return on Capital- 2% Lending Rate- 24% Borrowing Cost- Regulatory Issue Operating Cost- Process & Technology

MFI Cost Structure:

Borrowing Cost- 12%

Operating Cost- 10%

Bad Debts &

Return on Capital- 2%

Lending Rate- 24%

Borrowing Cost- Regulatory Issue

Operating Cost- Process & Technology

Microfinance - Technology Back-end: Homegrown-not robust Cut & Paste banking software solution-expensive Front-end: Experimental – Handheld devices & mobile phones Communications: Issue for remote rural areas

Back-end: Homegrown-not robust

Cut & Paste banking software

solution-expensive

Front-end: Experimental – Handheld devices & mobile

phones

Communications: Issue for remote rural areas

New Frontier 600 million working poor in the next 20 years for financial institutions & IT service providers. New Solutions taking advantage in the tremendous advances in technology in the last two decades. Back-end – Robust systems which can handle very large volumes in cost effective manner. Solutions which reduce depence on cash. Solutions which take advantage of the great leaps in communication technology.

600 million working poor in the next 20 years for financial institutions & IT service providers.

New Solutions taking advantage in the tremendous advances in technology in the last two decades.

Back-end – Robust systems which can handle very large volumes in cost effective manner.

Solutions which reduce depence on cash.

Solutions which take advantage of the great leaps in communication technology.

The Prize Those who are able effectively serve the 600 million working poor will be the new leaders of the financial service industry in the next 20 years. Remember: Hindustan Levers sells 70% of shampoos today in sachets.

Those who are able effectively serve the 600 million working poor will be the new leaders of the financial service industry in the next 20 years.

Remember: Hindustan Levers sells 70% of shampoos today in sachets.

Thank you very much for your time and interest! Thank you very much for your interest and time. Samit Ghosh www.ujjivan.com