FINCA INTERNATIONAL INCORPORATED SMALL LOANS BIG CHANGES

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FINCA INTERNATIONAL INCORPORATEDSMALL LOANS
BIG CHANGES
East Agri Conference May 5, 2006 BERLIN, GERMANY
REGIONAL OFFICE FOR EASTERN EUROPE AND CENTRAL
ASIAPRESENTATION
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FINCA TOTAL NUMBER OF ACTIVE CLIENTS
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EURASIA REGIONAL PERFORMANCE
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EURASIA CLIENT BREAKDOWN AUGUST 2001 DECEMBER
2005, YTD 2006
Client Growth
17 10
16 78
6 46
25 41
Group Individual
46 173
43,063
46,851
59,369
110,024
95,239
36,198
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EURASIA CLIENTS AUGUST 2001 MARCH 2006
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EURASIA GROSS LOAN PORTFOLIO AUGUST 2001
DECEMBER 2005, YTD 2006
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FINCA Mission

• MISSION
• FINCAS Mission is to reduce poverty by providing
  financial services to economically active, poor
  families, so they can raise household incomes,
  improve their standard of living, and create
  jobs
• and to deliver those services through a global
  network of local, self-sustainable microfinance
  institutions.

FINCA International, Inc.
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Rural loan product overview
Rural lending - OBJECTIVES

• Objectives for FINCAs Rural Lending Products
• To expand the market for FINCAs services and
  enable FINCA to better fulfill its mission by
  serving (poor) people marginalized by existing
  financial services that are mainly geared toward
  trade services in urban areas.
• Develop and implement credit products and other
  finance products that answer the needs of the
  (poor) rural population, so that they can be
  provided with financial services in a profitable,
  sustainable manner.

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Rural loan product overview

• RLP Azerbaijan progress overview
• June 2003 Launch of the product in Southern
  Area of Azerbaijan
  
• January 2004 first RLP group was inaugurated in
  Western Area of Azerbaijan
  
• October 2004 FINCA Azerbaijan started to market
  RLP in North-East of the country
  
• Currently RLP is being marketed in overall
  operational area of FINCA Azerbaijan
  
• As of April 2006, F/Azerbaijan servers more than
  17,000 active borrowers with its RLP program,
  which amounts to approximately 50 of total
  clients

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Current Branch Network FINCA Azerbaijan
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Rural loan product overview

• RLP Terms FINCA Azerbaijan

Interest rate 3.5 per month
Other fees 2 Grace period
none Repayment frequency monthly Pre-ina
uguration Two meetingsdisb
period within 10 days
Loan security group solidarity Other
cash collection service in the villages
provided by FINCA
Group size min. 8 no maximum
Min. loan size 45 AzM/50USD Max. loan size 1
,000 AZM / 1,100 USD Maturity 6-12 months
Currency USD or AZM Loan use Farming Livest
ock purchase Trade in animals and ag products
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Rural loan product overview

• F/Azerbaijan Share of RLP product in overall
  clientele

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FINCA Tajikistan
RLP Tajikistan progress overview
December 2005 Launch of the product in the Kha
tlon region in Southern Tajikistan
As of April 2006, F/Tajikistan servers approxima
tely 1,000 active borrowers with its RLP program,
which amounts to 22 of total clients (share is
steadily increasing). We expect the RLP share t
o reach similar proportions to FINCA Azerbaijan
(i.e. more than 10,000, and around 50 of total
clients) within the next two years.
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RLP Terms FINCA Tajikistan
Grace period max 2-3 months, depending on loan
term Repayment frequency monthly Pre-inau
guration 2 meetingsdisb period w
ithin 10 days Loan security group solid
arity Other cash collection service in the vi
llages provided by FINCA
Group size 7 (5) no maximum
Minimum loan size none Maximum loan size
1500 SMN (500 USD) Maturity 3-12 months Cu
rrency SMN Interest rate 3 per month
Other fees 2
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Active Clients by Product FINCA Tajikistan
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Credit analysis

• Credit analysis includes all household income and
  expenses
  
• In case of problems with the main crop, there
  should be an alternative cash-flow for loan
  repayment
  
• Modification for tomato grower loans
• Borrower must have a business which is operating
  in rural areas and connected to producing
  tomatoes.
  
• Borrowers must have contract with Geha Food

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Plans for the future 1 CREDIT PRODUCT

• To investigate and design a new, individual rural
  lending product
  
• To pilot and launch the new rural lending product
  during 2006
  
• Features
• Stronger focus on product cycles
• Focus on financial analysis of financed ag
  project but not only!
  
• Larger loan amounts grace periods
• Need for collateral
• Sustainability of the product must be guaranteed
• ? Excellent portfolio quality required
• ? Efficient delivery mechanism required
• Issue availability of loan capital, especially
  in local currency
  
• ? assistance from investors/donors?

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Plans for the future 2a FINANCIAL SERVICES

• To investigate and design delivery mechanisms for
  the provision of financial services to rural
  areas that will greatly improve the efficiency of
  financial services to the rural population, and
  thus greatly improve their access to financial
  service
• ? This refers to
• Servicing credit products,
• Offering savings/deposits
• Offering other financial products, such as
  remittances
  

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Plans for the future 2b FINANCIAL SERVICES

• Ideas
• Mobile teller units (bank on wheels)
• Use mobile phone technology for payments
• For credit use hand-held computer devices for
  data gathering
  
• Issue limited financial resources for
  investigation and implementation
  

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FINCA conclusion what FINCA offers
A proven track record of sustainable development,
impact on poverty, and increased outreach
The ability to rapidly scale up new programs and
impact the lives of hundreds of thousands of poor
entrepreneurs around the world
A range of investment opportunities across
programs and regions