microStart in Belgium Group of social entreprises serving social cohesion 2

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Started as a pilot project in Our mission: Microloans (from 500€ to €; max. 36 months) business-related (existing or start-ups). The recipients must be unbankable. Free Technical Assistance to customers to help them launch & develop their activities, and to make sure the business survives. Adapt the regulatory framework for micro-entrepreneurship. Requirements: a cosigner for at least 50% of the lent amount. Costs: interest rates from 8,25% to 9,75%, commitment fee 5%. 4

Outcome: October 31th people met 700 microloans 5000€ average amount per loan

Experiment starting in December 2013 Micro-savings as collateral 6

1. Context - Sometimes trustworthy entrepreneurs can’t find a cosigner in their circle of friends/family or don’t want to for cultural reasons. - The majority of our target audience needs financial education. microStart is client-oriented, and wants to innovate in order to answer their needs 7

2. Our Inspiration Traditional microcredit systems in developing countries, based on the model used by savings and credit cooperatives. microStart goes back to basics, and tries to adapt that model to the Belgian framework 8

3. Constraints Solution: Deposit on a savings account. Money tied up for the duration of the loan. The loan is partially guaranteed. microStart is not allowed to collect any savings Need to develop a partnership with a bank close to our clients, and highly accessible Simple administrative process for microStart and its clients 9

10 History of savings in the past Or Observation period (min. 3 months) Micro-savings = min ¼ of the loan amount Microcredit reimbursement and incentive to keep on saving small amounts each month Technical support, financial education and reimbursement follow-up Savings account set-up (collateral) Credit underwriting and decision from the credit committee Difficulties to find a cosigner Micro-savings = collateral for the loan When the initial deposit is on the Bpost savings account (tied-up money), the loan can be disbursed 4. Process Matched savings program (20% of the deposit, max. 300€), Partnership with the Levi Strauss Foundation

To summarize… 1 Bottom up demand (loan officers translated their client’s needs into action) 2 Experiment of the savings program as collateral 3 Diversification of our services at no extra cost 4 Increase of our target audience 5 Increase of our expected results 11

Thank you for your attention 12 visvis