Scaling Up Micro Lending in California Disruptive Technology

Morning Agenda Welcome: Lena Robinson Paradigm Changes: Stanford Microfinance New Players Panel Bankers Panel Lunch at noon Lunch Keynote: Barbara Vohryzek

Disruptive Technology An innovation that creates a new market and value network, and eventually goes on to disrupt an existing market, displacing an earlier technology.

Disruptive Technology The term describes innovations that improve a product or service in ways that the market does not expect. Legacy organizations can miss the value of a disruptive technology, only to be left behind as the new technology matures and takes hold.

Technologies Big data and behavioral algorithms Automated data access & assessment Cloud-based technology & programming Online processes Mobile technology

Changing Norms New technology is not just putting traditional lending processes online. New technology is changing lending norms. What’s offered On what criteria To whom How delivered How quickly At what price By whom How restructured

Impact on Microlending Sophisticated technology available to smaller companies Technology is changing the profitability of microlending Bringing new players into the market Creating new forces, like crowdfunding Raising new expectations among borrowers

Rapid Expansion ‘New-paradigm loans’ widely available Taking hold in the market rapidly

Stanford Micro Finance Group Big Data Meets Micro Finance Online Microlending, Machine Learning and Changing the Market Luis Armona Julia Reichelstein

New Players Panel Tom Green, Lending Club Brad Lensing, Prosper Leslie Payne, Lend Up Paul Quintero, Accion East

New Players Questions What loan products are you offering? What is your market, and how do you reach it? What is your application process? What information do you require? How do you assess clients? What technologies are you using for marketing, document collection, underwriting and servicing? How quickly can you fund a deal? What is your current volume?

Banker Panel Moderator: Barbara Vohryzek, Governor’s Small Business Advocate Fred Mendez Rabobank Lena Robinson Federal Reserve Bank of San Francisco Herman White San Francisco Fire Credit Union

Afternoon Agenda - Members Lending Academy Member Panel Devon Johnson, Women’s Economic Ventures Naldo Peliks, Centro Community Partners Breakouts Group Discussion and Survey

CAMEO MicroLending Academy E-newsletter Peer Learning Training Individual Consulting Professional Development Technology Support Goals Increase microlending, capacity, technology adoption and access to capital. Features:

Women’s Economic Ventures Devon Johnson Microloan Management System (MMS)

MMS Supports lending here Outreach Application Risk Assessment Document Collection Underwriting Credit Memo Closing Servicing & Collections

WEV’s Experience Doubled deal capacity Quicker, clearer decisions Saving time: less upfront admin/touch files less Invest time after client gives basic info Time spent on more viable prospects Could expand with less experienced employee

WEV’s Experience Not trying to duplicate our previous process Stepping into MMS: Investing time to understand rationale for particulars, especially required docs, loan amount and underwriting Giving it a year

Centro Community Partners Naldo Peliks Business Toolkit Presentation

Quick Dyads and Group Discussion Find someone who is not in your organization. What response to these trends should our industry be considering? What strategic steps could my organization take? Is there a role for CAMEO to support members adapting to new lending environment?

Closing Wrap up from Claudia Viek Please complete your survey MMS detailed Q&A available after closing

Thanks!!