MICROFINANCE INTERNATIONAL CORPORATION

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MICROFINANCE INTERNATIONAL CORPORATION
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• Microfinance International Corporation
• founded by Atsumasa Tochisako, former General
• Representative in Washington for the Bank of
  
• Tokyo/Mitsubishi to create opportunities for
  poor
• people in Latin America.
• Offices in Washington, DC and San Salvador, El
  
• Salvador .
• Supported by MIF, JICA, GTZ, Bretton Woods
• Committee etc.

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Corporate Objective
Increase the Reach of Microfinance
Create Opportunities for the Poor
Help MFIs to Increase their Customer Base
Sustainability
Improve Access to Affordable Capital
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• Leverage the Development Potential of
  Remittances
• Use Remittance float to create a zero cost pool
  of funds for
• lending to MFIs
• Provide MFIs with a dedicated and customized
  remittance
• platform and a marketing channel in the US
• Support MFIs in marketing to both recipients of
  remittances and
• remitters in the US

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Remittance-Float Supported Lending Program

• Improve small MFIs loan eligibility by
  increasing
• depository and client base through remittance
  offering
• Simplified application procedure and innovative
  risk
• assessment of lending program allow lending
  to small
• and rural institutions.
• Raise capital through issue of Microfinance
  Bonds
• backed by Corporate Foundations, Trusts and
  
• Multilaterals

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Remittance Market in US

• More than 10,000 Money Transfer Companies with
  in
• excess of 100,000 agents
• Average commission has decreased from US 20 in
  1998
• to US 14 in 2003.
• Market leader traditionally Western Union but
  now about
• 10 other Money Transfer Companies that cover
  most of US
• and Latin America.
• US banks and banks from Latin America latest
  entrants.
• Typically cash-to-cash transfer through
  brick-and-mortar outlets
• but recently increasing efforts to leverage
  payment cards and
• ATM cards.

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Distribution Channels Access Points in DC Metro
Area
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Distribution Channels Reasons for Selection of
Access Point
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Distribution Channels Other Reasons for
Selection of Access Point

• Immigration Status
• Large proportion of remitters are
  undocumented and often do not
• posses the paperwork required by banks.
• Distrust of Financial Institutions
• Negative Experience from home countries,
  lack of understanding
• of financial systems and fear of deportation
  result in distrust.

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Distribution Channels Criteria for Selecting
Money Transfer Company
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Remittance Market Information Sources
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Distribution Channels - Problems

• Power of Distributor Results in High Cost
• Distributors often determine the selection
  of Money Transfer Company
• and own the customer.
• Compliance
• Distribution through non-financial retail
  outlets results in problems with
• compliance due to lack of appropriate
  processes and training.
• Financial Risk
• Distributors lack of financial stability
  and ability to provide financial
• service efficiently results in financial
  risk, poor service and transfer
• losses or delays of transfers.
• Loss of Benefits for Remitter
• Remitters do not generate Credit History, do
  not receive appropriate
• financial advice and have no access to
  current or savings accounts.

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Remitters that use
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Operational Issues

• High Volume/Low Value transactions
• Money transfer is high volume/low value
  service so requires efficiency
• to make revenue model work. Retail outlets
  on average process 15
• transactions a day
• Little Penetration of Internet and Electronic
  Payment Methods
• Few Remitters use the Internet or have
  electronic methods of
• payment so that the ability to use
  technology to reduce cost/increase
• efficiency is limited.
• High Service Requirements
• Language barrier, limited understanding of
  financial products and
• sometimes unorganized customers require
  intensive and customized
• service.

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Microfinance Internationals Solution

• Non-banking financial shop as intermediary
• between Remitters and financial institutions.
• Culturally adapted one-stop-shop providing
• essential financial services and financial
• education.
• Leverage information gained from
• Employment Services, Money Transfer and
• Debit Card as Credit Record for Loan
  Products.
• Functions as marketing channel for banks and
• MFIs in Latin America.

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Sister Company - MicroManos

• Latino Employment Services Company
• provides stable employment and insurance for
• Latino workers.
• creates large database of Latino customers with
  
• stable employment and salary records.
• since incorporation in June 2003 has attracted
• 2,000 Latin customers and provided
  employment
• to almost 1,000 Latinos.

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Mi Pueblo Objective

• 30 40 Shops in key Latino hotspots throughout
  the US
• Co-operation with Credit Unions, Banks and
• Community Organizations
• Customer base of 100,000 bankable Latinos with
• stable income and credit record by 2006.

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Mi Pueblo Remittance System

• Real time, low cost money transfer service with
  
• unique benefits to Remitters and Recipients.
• Internet-based software platform providing high
  efficiency
• and compliance.
• Value-added services such as Payment
  Instructions,
• Credit Record and Loyalty Program allow to
  increase
• revenue-per-transaction and customer loyalty.