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Creating Opportunity Where It’s needed Most
ASA-OCF Lending GroupA microfinance venture in Ethiopia
Presented By:
Abishek
Akihiro
Jose
Ruturaj
Sylvia
Takahiro
Ethiopia’s potential
2013 2014 2015 2016
GDP($ bn) 43.2 45.6 49.3 51.2
GDP(Birr bn) 94.1 96.5 98.9 101.4
population 94.1 96.5 98.9 101.4
GDP Per capita 1355 1431 1522 1614
44%
20%
29%
4% 3%
Age Structure0-1415-2425-5455-6465 above
Total
Youth
Elder
0 10 20 30 40 50 60 70 80 90
83.5
77.2
6.3
Dependancy Ratio
70%Unemployment Rate
Who we are
ASA• Association for Social
Advancement • Largest MFI• In Existence Since 1978,
Headquarter Dhaka• Product: Loan Ranging from
$100 to $ 4868• Services: Education and
Training • Success rate: 99.36%
OCF• Oromia Coffee Farmer Co-
opertive• Est. 1999• Represent 102,000 farmers• Promotes standard, organic and
fair trade practices• Profit share 70:30
Joint Venture Structure
• Name: ASA-OCF Lending Partners • Customer Segment :Coffee growers of Ethiopia
Transnational strategy: • Standard global product offering • Localized loan interest rates
ASA OCF
Access to OCF network Access to ASA’s financial/non financial resources
Risk sharing Increase market share and bargaining power
Benefits
ASA- 49%
OCF – 51%
Product Details
• Category: Primary Loan• Loan Amount: Birr 1,000 - Birr 8,000($50 - $400)• Interest rate: 18-20% and 16% for population with good credit
rating• Repayment Terms: 18 and 24 months• Incremental Increase on next installment: Birr 12,000 (Max)
Positioning for Success
Regulatory Environmen
t
Local Demand
Resources Available/to
Develop
Ethiopia’s Factor
Conditions
Cost Benefit Analysis
Cost Expenses/Average assets - 16.48% (2002) to 21.34% in 2011.
Financial costs/total average assets - 2.65% in 2002 to 4.00% in 2011.
Administrative costs on total expenses - 58.02% in 2002 to 65.94% in 2011.
Growth The number of savers - 2.14M in 2002 to 4.94M in 2011.
The value of saving - $3,2178,929 in 2002 to $171,852,182 in 2011.
The number of borrowers -1.98M in 2002 to 4.36M in 2011.
Efficiency Effective yield on assets - 11.94% in 1992 to 25.13% in 2011.
ROE(Return on equity) - 2.07% in 1992 to 11.82% in 2011.
ROA(Return on assets) - 1.31% in 1992 to 7.06% in 2011.
Risk Analysis
Management Risk
Mitigation Plan• Corporate restructuring
• Cultural analysis and integration
• Incorporation of Vision an Mission at macro and micro level
Risk Analysis
corruption
Mitigation Plan• Decision making with higher management
• Employee rotation at equal interval
Exit Strategy
Sell off to the Local Competitor
OR
Spin Off and take public
OR
Close down and sell asset
Benchmark for Success
• Maintain Operational Self Sufficiency above 190% and Financial Self Sufficiency above 128% in Ethiopia
• Reach Break even Point in 2 years• Maintain
• Rate of recovery to 99.36%• Loan Ratio to 0.22 percent
• Market capitalization : 2% of Birr 13044 Mn: Growth targeted at 10%
Thank You