FINANCIERA EDYFICAR August 2010

1.Brief history of Financiera Edyficar 2.Funding Structure and its evolution Agenda

Brief History of Financiera Edyficar o More than 12 yeas of experience o A growth story with a solid and healthy position o A local market that offered and continues offering significant opportunities Challenges o To continue expanding and consolidating its client base o Maintain its # 1 ranking in the MES segment

Brief History: More than 12 years of experience Porfolio: USD 3.83 MM Clients: 6 M Jun-2010 Securitacion for microfinance Acquisition the Edpyme Crear Cusco Initial Stage as Edpyme First non-banking microfinance company to successfully acces the Capital Markets Portfolio: USD 185 MM Clients: 181 M Subordinated debt Edyficar acquisition by BCP Portfolio: USD 289 MM Clients: 246 M

Brief History: Edyficar, a growth story… Edyficar’s acquisition represented an opportunity : ▶ To acquire a successful business model for a high-growth segment. ▶ To maintain a key role in the microfinance segment. Since 2005, Edyficar’s loan portfolio presents a compounded annual growth rate of 44% Total Loan Portfolio (USD MM) Total Cliente Base (Thousand)

Brief History: …with a solid and healthy position

Brief History: MES segment has a lot of room to grow Banking System 5 million in the Banking System 9 million out of the Banking System 34% MES

The financial market offers significant opportunities and challenges for the next years in the funding front… Opportunities New funding at interest rates adjusted by new risk conditions New funding from deposits of Mutual Funds, Pension Funds, Commercial Institutions, etc. Restructuring of Debt More investment opportunities - Create investment portfolio Improve the management of Edyficar’s assets & liabilities and its overall financial structure New product of “micro savings” …offering important opportunities in the local market Short – Run Improve cost of funding High rate of investments Strengthening of Capital Long – Run Social inclusion Acquisition of IMF’s Challenges Deposits Certificate Corporate Bonds Program First Subordinated Bonds Capital Market

Brief History: BCP’s Client Base Consolidation

Brief History: BCP + Edyficar rank # 1 by MES loan portfolio

Funding Evolution o Structure over time (last 5 years) o Types of funding o Advantages and disadvantages of each type of funding o Structure before and after acquisition o Social impact of financial improvements o Future of funding: challenges and opportunities

Funding: Structure Over Time Edyficar acquisition by BCP 39% 27% 20% 28% 44% 50% 44% 36% 49% 32% 6% 23% 15%

▶ Public-sector funding Quick process, always available and at lower cost. Offered short and long term. After entering the capital market we decided to decrease this type of funding because it is perceived as high risk. Considered and available line of contingent funds. ▶ Commercial debt Better conditions offered every year by microfinance funds, like local currency debt or guarantee- free funding. Diversification strategy. They value transparency: Edyficar provided investors with updated information. Need to establish polices of asset & liabilities management ▶ Bonds/CDs Improve asset & liabilities management ▶ Deposits of Mutual Funds, AFP, other institution Access to the local financial market with good financial conditions, according to new perception of institutional risk. ▶ Equity Strengthen its equity through capitalization of profits to achieve sustainable growth. Funding

Funding: Advantages and Disadvantages of Each Type InstitutionAdvantagesDisadvantages Mutual Funds Good Interest rate × Short –term financing × Only Financieras and Banks × Requires solid credit rating Government Funds Good interest rate. × Only Financieras and Banks Capital Market Loans in local currency Well diversified × Long process required by the regulator. × IMF has to pay management fees. × More spread to lower credit rating Government Bank Interest rate better than Microfinance Funds, but still higher than government fund and mutual fund. × Limited loan of credit × No good image to credit-rating companies (government policy risk) Microfinance Funds Long term- financing × No flexibility × Increase funding cost by hedge. × IMF has to pay management fees.

Funding: Structure Before and After Acquisition Average Cost of Funding (Before and after acquisition) Funding by currency in millions (Before and after acquisition)

Funding: Structure Before and After Acquisition Funding by supplier (Jun-10)Funding by destination (Jun-10) Funding by institution (Sep-09) Funding by institution (Jun-10)

Funding: Social Impact of Financial Improvements Diversification of funding suppliers and new debt conditions adjusted to the institutional credit risk decreased our interest spending improving our profitability. Encouraged by the cheaper funding, Edyficar plans to continue supporting the same economic sectors, keeping an average loan of USD 1,000. Furthermore, we’ve decided to increase our efforts to penetrate in regions where the banking system hasn’t entered yet, in line with the social function of microcredit.

The Future of Funding: Challenges and Opportunities ▶ Capital Market: Subordinated bond issues (equity strength) Corporate bond issues without guarantee Local Capital Market Continue with diversification of funding suppliers. Diversification of investment portfolio. Improve the management of currency and maturity gap. Treasury (ALM)

FINANCIERA EDYFICAR August 2010