1. BYU Microenterprise Conference March 14, 2003

2. The Face of Poverty Over 2.5 billion people—nearly half of the world's population — live on less than $2 per day Suffering is 24/7 Food is scarce Children die Hope is dashed WHAT CAN WE DO???

3. Are hard-working entrepreneurs Can’t get credit (small working capital loans) to run their tiny businesses profitably Are virtual slaves to loan sharks who charge 300% to 3000% annual interest Remain in poverty because they can’t “get ahead” many of the world’s poor: “The poor stay poor, not because they are lazy but because they have no access to capital” –Milton Fiedman

4. Microcredit loans offer an economic miracle Millions of self-employed poor have used $50 - $150 loans to work their way out of poverty

5. 1970s: The birth of Microfinance Institutions (MFIs) in places like Bolivia and Bangladesh MFIs offer small loans that are used to purchase supplies and inventory and improve infrastructure Borrowers repay principle and interest with lower delinquency than commercial banks, typically higher than 95% Proven results: Businesses grow, with profits improving family income Increased access to health care Increased access to education Improved housing Increased self-esteem Stronger communities

6. 30 million clients currently have access to microfinance

7. demand for microfinance Unmet demand is 90% of total, or 270,000,000 clients 30,000,000 clients currently have access to microfinance, only 10% of total demand Global demand is estimated at 300,000,000 clients

8. most MFIs are very small… Source: Microcredit Summit

9. …and most microfinace clients are served by the 30 largest MFIs Source: Microcredit Summit

10. …and those 30 MFIs contribute most of the growth in number of clients MFI size:

11. typical MFI growth curve

12. MFI growth constraints 1. Capital2. Capacity Non-profits funded by grants MFI is viewed as risky for a commercial loan Need to reach a critical mass to become profitable Internal Controls Management Procedures IT Infrastructure Organizational structure New product development

13. Unitus has developed a method for accelerating the growth of selected microfinance institutions (MFIs) Our approach rapidly increases the number of people receiving microcredit loans

14. Unitus Acceleration Model Phase 1 – Carefully select new partners Phase 2 – Structure a 5-7 year “custom” investment partnership Phase 3 – Acceleration (10x growth) Phase 4 – MFI achieves scale & self- sufficiency. Unitus exits partnership. Our goal is to create 2-3 new partnerships each year

15. what We Do

16. benefits of acceleration For the Loan Recipients Improved standard of living Increasingly successful microenterprises Enhanced business skills Strengthened social networks For the MFI More clients Operational and financial self sufficiency Stronger internal systems Access to sustainable funding For the Industry Validates systematic growth model Lowers risk profile for formal financial sector Encourages broader participation by philanthropists

17. initial unitus MFI partners Pro Mujer Mexico: $1,875,000 First Unitus investment: February 2002 Grew to 2,500 clients by December 2002 100% repayment rate 35,000 clients by 2006 with Unitus investment SKS India: $4,635,000 Anticipate March 2003 investment 12,000 current clients 100% repayment 300,000 clients by 2007 with Unitus investment

18. Microfinance Venture Investors Select the highest-potential MFIs Focus on accelerated, profitable growth Provide consulting expertise and oversight Not tied or limited to any one MFI brand or network Economic Development Engineers Customized financing using grants, equity and debt Connect MFIs to commercial funding in local countries Think of Unitus as:

19. “The poor stay poor, not because they are lazy but because they have no access to capital” - Milton Friedman, Noble Prize-winning Economist