1. Reaching Basic Financial Services to Rural India The Long & the Short of it

2. Company Confidential A Problem

3. Company Confidential Solution 1 - Long Term Teach them something they do not practice today

4. Company Confidential Solution 2 Immediate Term Give them something they want but cant have today

5. Company Confidential Problem: Financial Exclusion

6. Company Confidential Slow and Long term Solution Give them something they do not have

7. Company Confidential Fast, Secure, Efficient, Transformational & Sustainable Solution My Bank My Mobile Use something that they already have

8. Company Confidential Banks vs Telcos – penetration trends BCG research report 2007 Current Gap is 26 mn households Est. 30 mn new subscribers getting added per year in Rural India Mobile base to cross 600 mn by 2010 0 100 200 300 400 500 600 700 20062007200820092010 Mobile SubsBank AccountsUnique A/c Holders RBI reports 2007 & 08 extrapolated, COAI, RBI reports Dec, 2007 (In Millions)

9. Company Confidential Rural subscriber acquisitions in last few months Rural population estimated at 70% of total population Rural acquisitions continue to out perform urban additions * Source COAI report

10. Company Confidential Some relevant research States with higher mobile penetration expect faster growth –1.2% higher growth rate for every 10% increase in the mobile penetration rate  Farmers prioritise following services  weather forecasting  plant protection (disease/pest remediation)  seed information  market prices  Basic financial services

11. Company Confidential Telco customer contact points Rural population estimated at 70% of total population Good penetration of Telco points in rural India & growing fast * Industry estimates

12. Company Confidential Going Beyond Distribution KYC procedure Processes & systems Technology Customer handling Cash management Customer education & training Softer Issues drive success of such systems

13. Company Confidential Telco’s Limited role In Mobile Payments TELCOTELCO Mobile Payments Mobile Banking Mobile Commerce Pay Bill IRCTC Airtime CUSTOMERCUSTOMER

14. Company Confidential Wider role possibel in Financial Inclusion TELCOTELCO Open Bank A/c Cash Deposit & Withdrawal Funds Transfer Investments Insurance Faster Financial Inclusion DISTRIBUTIONDISTRIBUTION CUSTOMERCUSTOMER

15. Company Confidential Possible solutions In partnership with Banks, –Telcos could function as BCs to propel Financial Inclusion! –Telco retail points may be allowed as Agents/Members of the BC for last mile service! –Telco retail points can assist in opening Bank accounts & for Customer’s Cash-in/Cash-out in these Bank Accounts! Banking through Banks..... reach through Telcos

16. Company Confidential Case Study - M-Pesa in Kenya The story is Similar for Smart in Philippines & others Fast Facts Run by Safaricom, Vodafone’s local partner, with a subscriber base of 15 million Launched in March 2007 Over 5 million registered users (30% of Telco base) Approx. US $ 760 million already transacted Over 5,000 agent locations against 750 bank branches Kenya is the size of one large state in India with a population of 31 million GSMA Golden Mobile award for Best Money transfer service Similar Bank Telco ratio Less than 20% of Kenyans have access to a bank 55% of Kenyans have a mobile connection