Harvard Summer School 2010: International Business Team 8 Final Project: Micro-Lending By: Austin Cunningham (Suwanee, USA) Johannes Georg Matthias (Berlin, Germany) Sohum Mehta (Gaborone, Botswana) Rahil Pujara (Rajkot, India) Xiaoya Li (China) MICRO-LENDING Microfinance Botswana

Goal:provide micro-lending solutions to the working class of Botswana. Loans vs. collateral These loans will be secured against future salaries and the interest will first be deducted before being paid to the clients Goal Microfinance Botswana

loans of between USD $80 –USD $500 with a term between 1 to 3months. Product Microfinance Botswana

working class Botswana citizen looking for a financial solution to maintain their lifestyle. These people are employed in lower-management of manual labor positions with a monthly salary of $50-1,000. The mining industry currently employees over 50,000 people providing a large base of potential clients as mines are labor intensive. Target Market 614,000 potential clients nationally 400,000 concentrated in 3 urban areas Employed in Current Position Over 1 Year Currently 10 B2B & +2,000 client introductions Conversion growth rate = 2% of sales Microfinance Botswana

total population of Botswana is 1.9 million. 614,000 are of working age between years old. unemployment rate of only 7.5%, placing most of the people in the working class. Delta Financial operates from Gaborone, Botswana targeting most companies’ headquarters. As the b2b contracts can only be signed at a high management level. The geographic area of service includes the cities of: Gaborone - 199,600 Francistown - 89,100 Molepolole (Semi Urban Village) - 58,600 Selibe Phikwe (Town) - 53,500 Maun (Semi Urban Village) - 47,000 Market Description Microfinance Botswana

The business Delta Financial targets to provide employee-financing solutions will have the following characteristics: Over 100 employees Monthly Payroll over USD$ 10,000 Accurate and Full Data on all employees Compliant with local work authorization regulations Willing to enter contractual agreement with Delta Financial Target Customers Microfinance Botswana

The individual target clients at these companies will have these characteristics: Monthly Salary between USD$50-USD$1,000 Employed in current position for over 6 months Literate and able to enter a legally binding contract Target clients Microfinance Botswana

Adoption of a B2B model by Letshego, which would cannibalize our competitive position. Bankruptcy of the B2B companies The barriers to entry are increasing as the government begins to regulate the industry. Risks Microfinance Botswana

work-sight presentations Miss Botswana 2009 The product is customized rather than standardized Marketing and Sales Strategy Microfinance Botswana

The Competition competitor in the Pay-Day Lending Industry Letshego (90%) Blue Financial Services (7%) Other (3%; fragmented amongst 10+ companies) commercial banking infrastructure is not available to the general public (our target market) Traditional banks like UK based Barclays, have strict lending procedures. There are a select few, who purchase vehicles, homes that can receive financing from the traditional institutions. Microfinance Botswana

Letshego is positioned as the strongest competition with a loan book of $20million and a 90% domestic market share. Microfinance Botswana

Lower Default Rate Lower Interest Rate B2B connections Direct Client Introductions through the B2B connections Advanced Internal Credit Rating System through our B2B connections More Flexibility In Financing Instruments Minimal Infrastructure expenditures Open end funds, Investment Fund, stock corporation On the spot – Instant Loans We excel at establishing strong Advantages Over Competition Microfinance Botswana

Company Structure Microfinance Botswana Board of Advisors

Long Term Outlook Implement e-Cash Solutions Pre-paid Debit Cards Minimal Cash Control Roll – Up Micro-Loans into CDOs Via Internal Credit Rating System Provide Debt instruments to finance corporate acquisitions Microfinance Botswana