1. Keys to the Kingdom

2. Kathy Gregory Experienced entrepreneur Started a software company 15 years experience as a real estate agent VP of mortgage lending for a Canadian bank Started Pardigm Mortgage processing company

3. Paradigm Current Situation Provides business processing outsourcing services to mortgage lenders in Canada Sub prime crisis was hitting US....Canada stricter finance rules helped them avoid similar crisis but the effects were felt around the world.....money started to dry up In canada, start up and foreign institutions started entering the mortgage lending industry in Canada........

4. The mortgage market became more competitive Kathy identified an opportunity to provides these new lenders with the services to facilitate mortgage processing, lines of credit, and home equity loans She would customize her services according to the finance rules....of each unique market she served Paradigm quickly became successful, administering 3 billion of mortgages

5. It doubled to 6 billion one year later Rev grew to 29 million Earnings before interest, taxes, deprecation... were 4 million Offices in Toronto and Vancouver 147 employees They provided superior customer service Conducted audits to ensure accuracy and to mitigate risk, and follow best practices for the industry developing a solid reputation

6. In 2007 paradigm started working with Canadian Muslims They identified an opportunity to develop sharia compliant mortgages Sharia is Islamic law.....illegal to pay for the use of money.....the bank would have to buy the property and the buyer would have to make payments to buy it from the bank at a higher price No late fees are applied The bank asks for collateral but the property is in the name of the buyer???? Saudi investors wanted paradigm to help them build a mortgage business in Saudi The Saudis were well educated and had the money The saudis had experience in construction, oil, insurance, equipment leasing

7. The Saudis would create a new company that would sell mortgages to low and middle income families A joint partnership would be created between paradigm and tlc, the Saudi company 10 million in start up capital would be needed Of which paradigm would put up 1 to 2 million Paradigm would own 40% of company

8. Meanwhile, the sub-prime crisis affected markets around the world and the recession hit As governments tried to shore up financial institutions, banks stopped lending..... With a recession looming for the foreseeable future, they decided to put the joint venture on hold...........

9. SAUDI DEMAND FOR REAL ESTATE 91% of Saudis lease houses 42% want to own 66% could afford to buy Def a growth market Mortgage financing low in Saudi 2% of GDP Studies show that the Saudi real estate has huge growth potential

10. Current Competition in Saudi Arabia Real Estate Development Companies - provides interest free loans, many of which have been defaulted on Public pension agency - purchased homes for government employees and the military Saudi credit and savings bank Other commercial banks Mortgage Finance Companies A coalition of four companies formed to fund housing projects All knowledgeable in sharia finance law

11. Gregory and Saudis believe There is little competition There is a high demand for mortgages A new finance co would increase awareness A pending real estate mortgage law would drive demand The new law would provide protection to lenders And increase home ownership

12. CENTRAL QUESTION Should Paradigm form the joint venture and enter the Saudi market? Present Adv and Disadvantage Growth opportunity to enter new market Provides experience for entering other muslim markets in the future Young company with limited resources Real estate was a sketchy market at this point Cultural and religious differences huge.....Saudi is THE most restrictive country! Women have no rights in this country!!!!!!!!! Possibility of Anti-American partners...... Market not well regulated Not certain what the new law will look like

13. Pertinent Questions Would you do business in Saudi What are the risks.....The ambiguity of the pending law What about the competition in Saudi..... The newly formed coalition Do you have employees who known language and culture Are the financial terms of the deal favorable to Paradigm Does Paradigm have the resources to enter this market