SITUATION OF SMALL AND MICRO ENTERPRISE  Development of a new economy in our countries – emerging sectors.  In Peru, 98% of local enterprises belong to the small and micro enterprise sector.  Bureaucracy and poor access to credit.  Highly adaptable, dynamic enterprises which cannot project on a long term.

MIBANCO PROPOSAL  Acción Comunitaria (Communitarian Action) is a non-government organization which supports entrepreneurs of small and micro enterprises, present in Peru since  After 30 years of experience, it creates MiBanco, the first Peruvian private bank which assumes the responsibility of concentrating its efforts on the financial support for the development of micro and small enterprises.

FINANCIAL INTERMEDIATION MiBanco People resources, public and institutional National and International Financial Organisms Capital Market Stockholders Passive Products and Services In debt Securities Emission Patrimony Micro enterprises Small enterprises IFI’s and others Dependants Stockholders and workers Channels Sources Beneficiaries Active Products and Services Treasury Money Market Investments Financial Surplus (Utility)

OPPORTUNITY  Entrepreneurs of micro and small enterprises, avid for resources.  A business of great volume but high risk

CHALLENGES  Provide a modern banking service to an atomized market with little banking culture.  Follow the pace of a change reality that is quicker than normal.  Achieve an identification with each of our customers creating a banking service according to each particular reality.

THE PILLARS FOR ASSUMING THE CHALLENGE

CULTURE TECHNOLOGY Identification with the customer. Uphold our promises. The best disposition. Go beyond expected. EDUCATE MICRO AND SMALL ENTERPRISE IN BANKING TERMS PERSONNEL Empowerment. Training. Agility. Follow-up. Control. Precision. FIRST LINE PRODUCTS AND SERVICES

STEPS APPLIED TO REALITY

We start by identifying that which creates value for the customer 1.Need for a bank-educated payment between customers and suppliers. 2.Need for fast response to credit demands of customers with a reduction of risk for the bank. 3.Need for educating customers in banking terms in order to reduce risk. We identify the internal processes ADHOC 1.Payment system through specific credit line for customers and suppliers 2.Customer evaluation system containing necessary information and in real time 3.Customer Attention and distribution system permanently informed of their situation. How to reach the clients efficiently and effectively. 1.Access to electronic banking 2.Customer data scoring 3.Automated sales force (Palm Pilots)

THEREFORE TECHNOLOGY IS WHAT MAKES THE ABOVE POSSIBLE

DATA SCORING PRODUCT DESCRIPTION  Online system of customer’s bank movements and payment history.  Credit evaluation module.  Business advisors and sales forces can enter the system to evaluate future expenses for a specific customer. BENEFITS  Speed in response to client.  Risk reduction. TECHNOLOGICAL SUPPORT  Development of datamart and data warehouse.  Conectivity and hardware in commercial branches.  Information storing by different means (Cards, electronic bank, ATM)  Information digitalization and normalization.

AUTOMATED SALES FORCE PRODUCT DESCRIPTION  Development of an automated system for sales forces that allows the input of customer-related data using Palm handhelds.  Sales force synchornizes the information obtained from contact with the customer with information contained in the bank’s data warehouse. BENEFITS  Agility in the storing and exchange of information.  Information digitalization and normalization. TECHNOLOGICAL SUPPORT  Normalization and identification of relevant data to consider in the system.  Software development for mobile sales force.  Implementation of necessary hardware (palm pilots, synchronization centrals).

ELECTRONIC BANK PRODUCT DESCRIPTION  Development of systems that will allow the electronic transaction between customers and different economic agents, both national and international. BENEFITS  Opening to new customers and transactions.  Agility in operations. TECHNOLOGICAL SUPPORT  Web Page development, transactional systems and databases.  Infrastructure in output mouths. (ATM, POS, Agency systems).  Conectivity.  Digital certificates (VISANET).

DISTRIBUTION CARD PRODUCT DESCRIPTION  Credit card granted to clients with a specific line of funds to pay to a certain supplier.  Each card may contain multiple credit lines.  The supplier visits the client and the latter pays for products with the credit card and specific line assigned to that supplier. BENEFITS  Customer obtains credit fast.  Order for the customer in the payment issue.  Reduction of the accounts receivable cycle of the supplier.  Bigger follow-up of the client’s history. Risk reduction. TECHNOLOGICAL SUPPORT  Real time system of account conciliation.  Wireless hardware y POS handed to the supplier’s sales force.  Risk analysis system and fast and secure emission of credit lines.

PRODUCTS INTERNAL PROCESSES Savings Previable funds Current Accounts Debit cards Credits Commercials Consumption Time deposits Mortage CREATION OF VALUE Management control Business Finances Risks T E C H N O L O G Y Knowledge Management Exploitation Data Mart Data Warehouse Window Business Back Office Electronic Bank Internet Mobile Bank Phone Bank Points Of Sale

CULTURE TECHNOLOGY Identification with the customer. Uphold our promises. The best disposition. Go beyond expected. EDUCATE MICRO AND SMALL ENTERPRISE IN BANKING TERMS PERSONNEL Empowerment. Training. Agility. Follow-up. Control. Precision. FIRST LINE PRODUCTS AND SERVICES

T E C H N O L O G Y CULTURE Identification with the customer. Uphold our promises. The best disposition. Go beyond expected. EDUCATE MICRO AND SMALL ENTERPRISE IN BANKING TERMS PERSONNEL Empowerment. Training. FIRST LINE PRODUCTS AND SERVICES

 The product is important  Culture is more important There are fundamental elements to create value in the enterprise: But technology is the vehicle the will allow us to deliver such value in the right place and time

RESULTS UP TO OCTOBER 2002 Disbursed US$ 295’858 US$ 417’820 Customers served 456, ,851 Gross investment US$ 61’327 US$ 78’795 Active customers 77,942 94,431 Arrears 2.80% 2.94% Covering 147% 150% A December 2001 A October 2002

CUSTOMERS

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