Women’s Microfinance Network Non-banking Deposit and Credit Organization RUSSIA 1

Women’s Microfinance Network: Founded in 1998 with the support from Women’s World BankingFounded in 1998 with the support from Women’s World Banking Mission – build middle class, develop local economy, encourage initiative and entrepreneurship by opening access to financial resources for small business ownersMission: – build middle class, develop local economy, encourage initiative and entrepreneurship by opening access to financial resources for small business owners Established By women and for women 2

WMN was established as an association of several non-for-profit entities forming a two-tier structure: 1st level – locally managed funds (partner organizations) located in several regions of Central Russia;1st level – locally managed funds (partner organizations) located in several regions of Central Russia; 2nd level - apex institution based in Moscow (NGO WMN)2nd level - apex institution based in Moscow (NGO WMN) 3

Fundraising (WMN lenders included Citibank, Deutsche Bank, IFC, Oikocredit, BlueOrchard, etc.) On-lending the funds borrowed from international lenders to the partner organizations Providing partner organizations with technical assistance (workshops, experience exchanges, consultations) Monitoring and auditing operations of the partner organizations; Reporting to foreign lenders on the performance of the association 1 st LEVEL: Offering micro loans 2nd LEVEL: NGO WMN (Moscow) NGO Fund Yaroslavl region region NGO Fund Yaroslavl region region NGO Fund Kostroma region region NGO Fund Kostroma region region NGO Fund Tula region region NGO Fund Tula region region NGO Fund Kaluga region region NGO Fund Kaluga region region NGO Fund Tver region NGO Fund Tver region 4

As an association of separate non-commercial legal entities WMN existed until Over the 7 years of successful growth and development the network disbursed loans, plus 4,672 loans since then in the amount of RUB bln. (over USD 60 mln., USD 1 = RUB 30) Plus 0.67 bln RUB since then. 5

Number of loans disbursed by WMN as an association of NGO funds in 1998 – 2005 in 1998 –

Amount of loans disbursed by WMN in 1998 – 2005 (thousand RUB) in 1998 – 2005 (thousand RUB) 7

Loan portfolio of WMN in 1998 – 2005 (thousand RUB) in 1998 – 2005 (thousand RUB) 8

In 2005 founders of WMN decided to consolidate the association of NGO MFIs into a single commercial entity as it opens new opportunities for growth and development. The goal of the transformation was to create a precedent of establishing a regulated Russian MFI. 9

Advantages offered by a regulated entity status include: clear legal basis for operations;clear legal basis for operations; access to an expanded range of financing sources and increased leverage;access to an expanded range of financing sources and increased leverage; governance structure with stronger accountability mechanisms;governance structure with stronger accountability mechanisms; strengthening of internal controls and monitoring;strengthening of internal controls and monitoring; increased standardization of credit operations.increased standardization of credit operations. 10

In Summer 2005 NGO WMN paid up 100% of startup capital (RUB 20 mln./ USD 645,161) of a newly registered credit company – Non banking deposit and credit organization “Women’s Microfinance Network”, closed joint stock company (ZAO NDCO WMN). In September 2005 ZAO NDCO WMN obtained its limited banking license authorizing it to capture time deposits from legal entities, invest the funds on the institution’s own behalf and at its own cost, issue bank guarantees and purchase and sell foreign currency in cashless form. 11

ZAO NDCO WMN started microfinance operations in January 2006 in Moscow. Credit products offered: Business and consumer loans RUB 5,000 – 350,000 (USD 160 – 11,300) for 2 – 36 months, interest rates 32% - 46% As of 31 December 2006 ZAO NDCO WMN loan portfolio stood at RUB 68 mln. with 78 clients RUB 59.8 mln. or 88 % of the loan portfolio were loans to 10 Russian MFIs. As in 2006 partner organizations hadn’t been transformed to ZAO NDCO WMN yet, the Board of Directors took decision to offer loans to different Russian MFIs (NGOs - credit cooperatives) in order to make the available funds “work”. 12

Consolidation of the partner organizations assets into ZAO NDCO WMN started in April 2007 and was completed in December Since 31 December 2007 ZAO NDCO WMN comprises Head office in Moscow and 11 branches in 5 regions of Central Russia: 11 branches in 5 regions of Central Russia: 4 bigger branches in the regional centers of Kaluga, Tula, Kostroma and Tver4 bigger branches in the regional centers of Kaluga, Tula, Kostroma and Tver 7 smaller branches in the towns of the same regions7 smaller branches in the towns of the same regions 13

WMN geography: 11 branches 14

Loan portfolio of ZAO NDCO WMN in (thousand RUB) in (thousand RUB) 15

Number of clients of ZAO NDCO WMN in in

Loans disbursed by ZAO NDCO WMN : Amount (RUB 000) Number 17

PAR 30 of ZAO NDCO WMN in in

Clients of ZAO NDCO WMN - economically active people, mostly women, with low income and traditionally excluded from accessing streamlined banking services.

Для производства: For farm owners: Для производства: «WMN was a helping hand in difficult times. I’d like to thank it very much. The micro-loans allowed me to double the livestock of my hog-raising farm» Tatiana Kukhto WMN micro-loans open new horizons