2. microloans via the internet

3. Vision and mission VISION To PROVIDE ECONOMIC OPPORTUNITIES FOR LOW AND MODERATE INCOME FAMILIES IN THE USA REGARDLESS OF THEIR PHYSICAL LOCATION. MISSION TO PROVIDE UNDER AND UNBANKED FAMILIES ACCESS TO FAIR-PRICED FINANCIAL SERVICES

4. HISTORY 1991 – Pilot Program of ACCION New York 1994 – Additional Licensees Started in Chicago, San Antonio, Albuquerque and San Diego 2000- ACCION USA Created to Lead ACCIONS Efforts in the USA. 2000 – 2002 Three Branch Offices of ACCION USA Opened in Atlanta, Boston y Miami 2006 – First Internet Loans Approved

5. THE US ACCION NETWORK IN THE USA ACCION International New England ACCION Chicago ACCION New Mexico ACCION New York ACCION San Diego ACCION Texas LICENSEES BRANCHES AND DIRECT LENDING Atlanta Miami Internet Puerto Rico ACCION USA

6. LICENSEES/DIRECT LENDING LICENSEES/DIRECT LENDING BRANCHES: Massachusetts, Rhode Island, Atlanta, Miami LICENSEES– Chicago, New Mexico, New York, San Diego, Texas Via el Internet – Arizona, Colorado, Connecticut, District of Columbia, Indiana, Kentucky, Louisiana, Maryland, Maine, Michigan, Mississippi, Missouri, New Jersey, Nevada, North Carolina Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Utah, Virginia, Washington, and Wisconsin

7. PRODUCTS AND SERVICES Term Microloans from $500 - $25,000 up to 48 Months Lines of Credit Credit Builder Loans (Immigrants) Financial Literacy Program Your Money and You

8. Results of the network: 12/31/2006 $179,000,000 Loaned to 18,167 Clients in 29,000 Loans: Average $7,400 Outstanding Loan Portfolio: $45,000,000 to 6,021 Clients Historical Loss Rate: 7.3% Financial Self-Sufficiency Varies from 30% to 80% 325 Loans Approved/Month 45% Women; 90% Minorities

9. Challenges to traditional model Licensees/Branch Offices Have High Fixed Costs Traditional Lending Model is High Touch Average Cost Per $ Loaned is $0.48 Interest Rates Are Regulated; Financial Margins Are Low (8- 10%) Self-Sufficiency Difficult; Requires Subsidy. Expansion to New Cities is Labor Intensive

10. INNOVATION: INTERNET LENDING OBJECTIVE: Make Low Cost Loans to Clients Regardless of Physical Location. REQUIRED CHANGES TO MODEL : New Design for Web Page in English/Spanish New Marketing Strategies New Software to Take Loan Applications Online Centralised Loan Service Center in Boston New Form of Loan Disbursement Using Notary or Electronic Signature

11. LENDING PROCESS: Client Completes Loan Application Online Loan Officer in Service Center Reviews Application Loan Officer Calls Client for Additional Information/clarification Loan is Declined or Approved and Disbursed Follow Up Survey is Sent to Client Automatic Payment Debit Collections Calls as Necessary INNOVATION: INTERNET LENDING

12. RESULTS TO DATE: Program Started in March, 2006 234 Loans for Total of $1.6 Million; Average Loan Size $6,791 215 Loans Outstanding for Total of $1.06 Million Loans Made in 35 States Portfolio at Risk: 6% ( same as all Loans) Cost Per $ Loaned: $0.37 INNOVATION: INTERNET LENDING

13. IMPLICATIONS/LESSONS LEARNED Board of Directors and Stakeholders Must be Educated on New Approach Traditional Truths Must be Challenged New Forms of Loyalty Among Clients Must be Developed Outreach and Marketing to Clients is Different INNOVATION: INTERNET LENDING

14. ACCION USA THANK YOU !

15. Visit us at: www.accionusa.org