1. responsAbility Investments AG www.responsAbility.com Consolidation and transformation Experience from the region November, 2015 Mirza Halilovic

2. responsAbility Investments AG www.responsAbility.com Today’s Agenda General reasons for consolidation and transformation Case studies: MFI acquired by a Bank Eki acquires Adria Bank acquires a bank Page 2

3. responsAbility Investments AG www.responsAbility.com Page 3 Consolidation and transformation General Drivers: New regulation Increased capital requirements New legal forms Changed market environment Increased competition New product offering Outcome: Merger Acquisition Transformation/Change of legal structure Mix

4. responsAbility Investments AG www.responsAbility.com MFI acquired by a Bank Same shareholders new structure Page 4

5. responsAbility Investments AG www.responsAbility.com Page 5 MFI acquired by a Bank Same shareholders new structure Rationale: Better cost structure Access to deposits Stronger regulation Steps for MFI: Step 1: Transfer of business Step 2: Capital distribution to MFI’s current shareholder Step 3: Bank acquires 100% of MFI’s shares emerging from Step 2

6. responsAbility Investments AG www.responsAbility.com Page 6 MFI acquired by a Bank Same shareholders new structure Shareholders Fund advisory company FundsFunds MFIBank

7. responsAbility Investments AG www.responsAbility.com Page 7 MFI acquired by a Bank Same shareholders new structure Shareholders Fund advisory company Funds MFI Bank  Result:  MFI has been consolidated on Bank’s balance sheet  Focus on microfinance clients  Bank can provide the MFI with preferable funding  Use of bank’s infrastructure

8. responsAbility Investments AG www.responsAbility.com Eki acquires Adria MFI transforms into company Page 8

9. responsAbility Investments AG www.responsAbility.com Page 9 Eki acquires Adria MFI transforms into company Rationale: Better cost structure Possibility to disburse larger loans Possibility to diversify shareholder base Steps for EKI: Step 1: MCF EKI (Foundation) made an offer to purchase 100% of Adria’s (Company) shares and become its sole owner. Step 2: Transfer Phase was to establish the operational integration between MCF EKI and MCC EKI (name changed from Adria). Step 3: Partner Phase and final phase to introduce VFI as a co-owner of MCC EKI.

10. responsAbility Investments AG www.responsAbility.com Page 10 Eki acquires Adria MFI transforms into company Company Foundation  Result:  Shareholding structure  Possibility to attract additional shareholders  Possibility to disburse higher loan amounts VFI

11. responsAbility Investments AG www.responsAbility.com Bank acquires another bank Brothering product offering Page 11

12. responsAbility Investments AG www.responsAbility.com Page 12 Rationale: Target is under capitalized Acquirer wants to expand in to the new market segment Steps for MFI: Step 1: Valuation of the target Step 2: Negotiations and agreement between the shareholders Step 3: Approval by the central bank Bank acquires another bank Brothering product offering

13. responsAbility Investments AG www.responsAbility.com Page 13 Bank acquires another bank Brothering product offering Shareholders Bank Bank  Result:  Well capitalized bank fulfilling all regulatory requirements  New business area for the acquirers