CASHPOR Micro Credit Social Performance and Impact Theme 3 - Our product and its delivery are specially designed to meet the needs of the poor, in a responsible yet sustainable way. 1

We Provide Meaningful Financial Solutions for the poor Financial Services for the Poor CASHPOR sanctions loans as small as Rs 2000 Loan interest stands at 26% declining rate Clients empowered with technical details through trainings CASHPOR strives to share economies of scale as feasible CASHPOR has structured its first loan size to range from Rs 2000 to Rs 8000 Average loan outstanding less than the per capita income in UP and Bihar. Continuous Group Training and Group Recognition Test form an important part of CASHPOR lending, empowering clients with financial literacy and enabling responsible credit behavior. CASHPOR interest rates have been reduced to 26% on a declining basis, thus being in the Yellow Zone as defined by Prof Yunus. Plans to further reduce rates to 24% by 1 April 2012, to enter the Green Zone. 2 High staff to borrower ratio (1 centre manager for 375 clients, FY 2010) ensures that the staff spend adequate time with clients on training, meetings and recovery.

A high percentage of our loans are for productive use Loan Activity % of Portfolio as of March Source: CMC Annual Report

…and we maintain Responsible Interest rates for clients Prof Yunus identified three zones of Interest Rates: Poverty Focused MFIs fall in the Green and Yellow zones. CASHPOR has reduced its interest rate to 26%, and entered the “Yellow Zone” as a poverty focused MFI with an interest rate of no more than 15% over cost of funds; and plans to get into the “Green Zone” by reducing its interest rate further to 24%. Interest to clients equals the cost of Funds at the market rate plus up to 10% Green Zone Interest to clients equals the cost of funds at the market rate plus 10 to 15%. Yellow Zone Interest rate higher than the Yellow Zone Red Zone Source: Prof. David Gibbons, Chairman- CASHPOR Micro Credit India 4

Loans for Productive Purposes enable “Progress out of Poverty” Area Manager: 20% sample Branch Manager : 50% sample Centre Manager: 100% In addition, CASHPOR is a highly responsible loan provider …. Rando m Audits CASHPOR performs rigorous Loan Utilization Checks, made possible by having the required high staff to customer ratio : 5

CASHPOR takes great care to establish clients can afford loans, and do not over borrow Productive Loans Promoting Financial Literacy through Trainings for Clients Responsible Interest Rates Loan Utilisation and Progress out of Poverty Checks 6 Reduce chances of Client Over- indebtedness

Thus, we have built sustainable value around a core market need Need for financial Services Provision of Productive Loans Loan sizes that enable productive use and are not a burden on the clients Affordable interest Rates Empowered (knowledgeable) client base and a meaningful service, with long term sustainability 7