1. MIT Mobile Monday Presentation November 2009 Your Micro-Business Partners

2. Executive Summary The Problem :Microfinance loans are often misused, causing borrowers to fall into a cycle of debt The Solution :Lending a franchise or a business in a box reduces this risk while providing new skills to the franchisee The Market :With high poverty rate and high mobile penetration, Indonesia is the ideal place for a mobile phone franchise What we do:We deploy business kits that enable franchisees to sell electronic airtime / “minutes” Our progress: We have created over 600 profitable franchisees What’s next:We plan on leveraging our network to deploy other services such as healthcare, education, retail, and agriculture

3. Microfinance loans are often misused, causing borrowers to fall into a cycle of debt ? What happens after cash is disbursed? Traditional businesses Consumption Gambling, theft, etc Potential problems No new skills gained Potential to fall into a cycle of debt Unnecessary interest payments The Problem

4. Lending a franchise or a business in a box reduces loan misuse while providing new skills to the franchisee Donors Donate money to sustain livelihoods Microfinance Lend money to start a business 4 Microfranchise The Solution Lend cash to start a business Lend a business to generate money

5. With a high poverty incidence and high mobile penetration, Indonesia is an ideal market for a mobile phone franchise Source: World Bank, CIA database 120 million out of 250 million Indonesians live with under $2 per day 140 million people are mobile phone subscribers Incidence of Poverty in Indonesia Operator Millions of Subscribers The Market

6. “Business in a Box” CDMA phone with ability to sell electronic airtime for all 11 mobile operators in the market *Materials provided by Bakrie Telecom Operating manual, transaction log, price list, other tools Promotional Banners and Flyers Ruma deploys business kits that enable franchisees to sell electronic airtime / “minutes” What we do

7. Ruma receives revenue from the sale of the kit and airtime Reduces the risk of misuse of funds Borrower gains new skills No unnecessary interest Franchised business provides more stable income $ Borrower sells prepaid airtime MFI leases kits Ruma trains borrower Ruma sells franchise kits $ Profits used to repay loans Ruma obtains a margin for each airtime sales 1 2 3 4 5 $ Benefits How it works What we do

8. 8 Name: Ibu Yanti Location: Remote Area in West Java, Indonesia Primary Business: Small convenience stand (warung) Her story: Ibu Yanti & her husband Pak Tisman own & operate a warung with ~20 products and vegetable stand Ibu Yanti & Pak Tisman have a five year old daughter The technology business delivers steadiest cash flow of all lines of business, providing ~$1/day in extra income on a consistent basis (50% overall increase) Additional income is used to expand inventory Estimated profit* (USD / week) Week Franchisees believe that the biggest benefit is the steady cash flow to supplement their existing business What we do

9. 9  Achievements  Secured funding from Grameen and Qualcomm  Created more than 600 new micro-businesses  100% profitability for micro-business owners  97% of micro-business owners are women  68% of micro-business owners were below the World Bank poverty line datum of $2.50/day when they adopted the business  Priorities Moving Forward  Financial: empower 5,000 of the poor and poorest by August 2011 to reach financial sustainability as a social enterprise  Social: reach target of 70% below poverty line  Deploy new franchise product line by Q4 2010 Ruma has created over 600 profitable franchisees How we’re doing

10. Agriculture and fisheries Connect farmers with buyers and suppliers Sell low availability products Give weather information Trade and distribution Build a franchised village shop Create POS visibility Create a mobile marketplace Medical products & services Deliver basic medical products Build Teledoctor service Integrated medical alert system Education and training Sell writing utensils, books Use the phone as interactive training tool Provide basic information services We plan to deploy new business kits in Q2 2010 What’s next

11. Take aways Microfinance is a good proven tool to alleviate poverty, but it can be improved The phone is the most feasible platform to enable affordable delivery of products and services to low income households Standardizing/Franchising increases the probability that a micro-business will be profitable If you have ideas, want to help, or have money, email me at : aldi@kiva.org 1 2 3