SVMN October 2007 meeting - eBay Microplace (Karl Willey)


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Microfinance presentation on eBay Microplace; for Silicon Valley Microfinance Network ( by Karl Willey

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  • SVMN October 2007 meeting - eBay Microplace (Karl Willey)

    1. Introduction Silicon Valley Microfinance Network November 2007
    2. Market Research Shows Strong Demand “ Save the World Enthusiasts” <ul><li>“ Web 2.0” segment </li></ul><ul><li>Young, idealistic, educated </li></ul><ul><li>Often with ethnic heritage </li></ul><ul><li>Energized by global impact </li></ul><ul><li>New to investing </li></ul>“ Socially-Conscious Affluents” <ul><li>“ Whole Foods shoppers” </li></ul><ul><li>Affluent professionals </li></ul><ul><li>Well-read & traveled </li></ul><ul><li>Want to match lifestyles with values </li></ul><ul><li>The “Oprah” segment </li></ul><ul><li>Older, female skew </li></ul><ul><li>Heavy online researchers </li></ul><ul><li>Socially active, but tend to focus more domestically </li></ul>“ Soccer Moms & Dads” MicroPlace’s market research has revealed three key target segments: <ul><li>Extensive quantitative research tested demand for MicroPlace offering at different interest rates and maturities </li></ul><ul><li>Interested users from our top 3 target segments represent 30% of the online population </li></ul><ul><li>They expressed interest in investing more than $22 billion </li></ul><ul><li>Market potential even greater at higher interest rates and shorter maturities </li></ul>Source: MicroPlace quantitative research study, December 2006
    3. Microfinance Industry Needs Capital Source: “Tapping Financial Markets for Microfinance” Grameen Bank USA Paper, 2005, Jennifer Meehan Figures are in Billions <ul><li>Tremendous success to date. . . </li></ul><ul><ul><li>Over 100 million borrowers </li></ul></ul><ul><ul><li>Over $7 billion of outstanding capital </li></ul></ul><ul><ul><li>97% historic repayment rates </li></ul></ul><ul><li>But global demand for microfinance far exceeds the current supply of capital </li></ul><ul><li>Up to $300 billion needed </li></ul><ul><li>Private capital will have to close the gap – donation capital will not be sufficient </li></ul>
    4. Microfinance Institutions (MFIs): “The Last Mile” There are approximately 10,000 microfinance lending institutions in all corners of the globe. They need capital to build their portfolios and their long-term sustainability
    5. Community Investing Growth <ul><li>At the same time, demand for socially responsible investment opportunities is on the rise </li></ul><ul><li>Community investing growth has taken off </li></ul><ul><li>But, despite the commercial viability of microfinance, there are few investment vehicles available for the everyday retail investor </li></ul><ul><li>And none have been available online, with the backing of a mass consumer marketing engine </li></ul><ul><li>Until now . . . </li></ul>
    6. MicroPlace Mission To alleviate global poverty by enabling everyday people to make investments in the world’s working poor <ul><li>Retail Investors </li></ul><ul><li>Lots of capital available for investment </li></ul><ul><li>Looking for new community investment options </li></ul><ul><li>Microfinance has high appeal, low awareness </li></ul><ul><li>Microfinance </li></ul><ul><li>Funds/MFIs </li></ul><ul><li>Proven poverty alleviation tool </li></ul><ul><li>Need for billions of dollars of loan capital </li></ul><ul><li>Self-sustaining industry with the ability to provide investment returns </li></ul>MicroPlace: Connects everyday retail investors with microfinance institutions in need of capital Investments Repayment $ $ Investments Repayment $ $
    7. How It Works MicroPlace is an investment website that raises capital for microfinance institutions and funds through the sale of securities to U.S. retail investors Individual Investors Security Issuers $250 $250 $300 $500 $500,000 $1,000,000 MFIs $500,000 $1,000,000 <ul><li>Purchase securities </li></ul><ul><li>Direct investment to MFI of choice </li></ul><ul><li>Receive interest and principal from security issuers </li></ul><ul><li>Registered broker </li></ul><ul><li>Mass-markets to investors </li></ul><ul><li>Assists with investor management </li></ul><ul><li>Create & register securities </li></ul><ul><li>Select / vet MFIs </li></ul><ul><li>Use funds to support MFI loans </li></ul><ul><li>Pay interest and principal to investors </li></ul><ul><li>Borrow funds from issuers </li></ul><ul><li>Use funds to make more microloans </li></ul><ul><li>Pay principal and interest to issuers </li></ul>(Examples for illustration)
    8. Example Investment MFI Info Security Issuer Key Terms Borrowers Investors purchase a Calvert Community Investment Note, and target their investment to a specific microfinance institution – in this case, TPC in Cambodia
    9. Site Overview Invest 1 Learn 2 Manage 3
    10. Benefits From eBay’s Mass Marketing Strength Mass Marketing Strength/Expertise Marketing Plans <ul><li>Public relations </li></ul><ul><li>Seasoned PR executives </li></ul><ul><li>Strong eBay press/media contact network </li></ul><ul><li>Online Advertising Expertise/Partnerships </li></ul><ul><li>Opportunities to advertise on eBay and PayPal, reaching millions of people </li></ul><ul><li>eBay is a huge internet advertiser </li></ul><ul><li>Viral (“buzz”) Marketing Resources </li></ul><ul><li>Thousands of employees eager to engage </li></ul><ul><li>Email Marketing Expertise </li></ul><ul><li>World-class campaign management technology </li></ul><ul><li>Print Marketing Experience </li></ul><ul><li>Opportunities for inclusion in eBay print media </li></ul><ul><li>PR </li></ul><ul><li>Broad consumer PR campaign to drive awareness of microfinance and MicroPlace </li></ul><ul><li>Online Marketing </li></ul><ul><li>Keyword advertising </li></ul><ul><li>Graphical advertising </li></ul><ul><li>Viral </li></ul><ul><li>Launch campaign to jumpstart site </li></ul><ul><li>Viral marketing functionality built into site </li></ul><ul><li>Email </li></ul><ul><li>Ongoing campaigns to existing investors </li></ul><ul><li>Print </li></ul><ul><li>Inclusion in eBay catalogs </li></ul>
    11. Tell a Friend! <ul><li>Spread the word about microfinance and MicroPlace by sending an e-card! </li></ul><ul><li>Free, easy, fun! </li></ul><ul><li>Choose from 6 designs </li></ul><ul><li>No registration required </li></ul><ul><li> </li></ul>