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www.l-pesa.comL-Pesa Microfinance
RON EZRA TUVALFounder & Managing Director
I-Pesa International Inc. (incorporated in Delaware)[email protected]
Phone: +97 254 4682519
www.l-pesa.comL-Pesa Microfinance
www.l-pesa.comL-Pesa Microfinance www.l-pesa.comL-Pesa Microfinance
Corporate Domicile
Future GrowthMarkets
Initial Launchin East Africa
Future GrowthMarkets
Future GrowthMarkets
www.l-pesa.comL-Pesa Microfinance
Launched to take advantage of market forces revolutionizing finance
First loan issued in Tanzania 20 months ago
Over 150,000 registered users, over 25,000 loans issued
Effective user acquisition engine developed
Loss ratio below 10%
www.l-pesa.comL-Pesa Microfinance
RON EZRA TUVAL
Founder &ManagingDirector
ANDREWLANGAT
KenyaCountryManager
DOMINICGICHOMO
Uganda CountryManager
RIAZLASKAR
Developer
Our TeamGlobal experience, local presence
BOHENRIKSEN
MarketingNinja
DESIREEEDOMO
Copywriter& PR
UTTAMKUMAR
KARMAKARDesigner
AMITABHROYIndia
CountryManager
www.l-pesa.comL-Pesa Microfinance
JAY SILUDSociallyInclinedContentCreator
ANGUALIADANIEL
Legal Counsel,Uganda
MALCOLMNGUGILegal
Counsel,Kenya
BERNARDKIPKURISupport
Our TeamGlobal experience, local presence
MSELEMSAID
Director,Tanzania
SANDIPANPAUL
Accountant
ANALISAMTETEMELA
SupportTanzania
YUNIAWARIOBASupport, Tanzania
www.l-pesa.comL-Pesa Microfinance
History of MicrofinanceBillions of dollars disbursed over hundreds of years
FRANCISCAN MONKS
15th Century
Community-based pawnshops providing financing
for poor farmers
RAIFFEISEN BANKS
19th Century
Cooperative lendingbanks/credit unions
lending to farmers andsmall merchants
MICROCREDIT BANKS
1970s
Lending in poorcountries based on
extensive branch networks
CROWDFUNDING
2005
Non-profitorganizations lendingin limited geographiesusing “field partners”
www.l-pesa.comL-Pesa Microfinance
UNDERWRITINGTraditional consumer and business credit reports used for loan underwriting in developed countries are generally unavailable, and loans without proper underwriting will result in high loss ratios
LACK OF BANK CREDITTraditional bank loans are not available to the vast majority of the population in developing countries
MICROFINANCE TARGETSAGRICULTURE ONLYTraditional microfinance institutions primarily lend to very poor farmers in rural areas. Middle class consumers do not have access to microfinance
OUTDATED OPERATING MODELSBoth banks and microfinance institutions have high overhead, struggle with a lack of data to for loan underwriting, and have generally failed to take advantage of new technology
MICROFINANCE TARGETS THE POOR ONLYConsumers, farmers and small business owners in developing countries above the lowest poverty level have few opportunities to obtain credit
MOST CONSUMERS UN-BANKEDMany of the consumers, farmers and small business owners in developing countries do not have bank accounts
PROBLEMS WITH PROVIDING CREDIT IN DEVELOPING COUNTRIES
Traditional banking or microfinance will never reach even a fraction of the available market
www.l-pesa.comL-Pesa Microfinance
Big Data, A.I. & Blockchain
AlterativeCredit Data
MobileTechnology
BiometricIdentity
BIG DATA, A.I. & BLOCKCHAINNew tools allow for storage of vast amounts of data and extensive data analysis at a
fraction of the cost encountered just a few years ago. Advancements in Artificial Intelligence provide new opportunities for automated loan
underwriting.Blockchain allows for faster, safer and less expensive exchange of value.
www.l-pesa.comL-Pesa Microfinance
Big Data, A.I. & Blockchain
AlterativeCredit Data
MobileTechnology
BiometricIdentity
ALTERATIVE CREDIT DATAJust a decade ago, there was very little data available on most of the people in the
world. This has changed with the advent of social media and related trends.New tools have been developed to make this data useful for loan underwriting
decision making.L-Pesa has developed a unique, proprietary credit scoring model based on user
behavior combined with traditional and alternative credit data.
www.l-pesa.comL-Pesa Microfinance
Big Data, A.I. & Blockchain
AlterativeCredit Data
MobileTechnology
BiometricIdentity
MOBILE TECHNOLOGYThe rise of the mobile phone over the past two decades has been one of the most
profound technological and market shifts in human history. A large majority of humankind now owns a mobile phone, and many own smartphones. Mobile financial services such as M-Pesa have become available in many countries and support both
the banked as well as the unbanked population.
www.l-pesa.comL-Pesa Microfinance
Big Data, A.I. & Blockchain
AlterativeCredit Data
MobileTechnology
BiometricIdentity
BIOMETRIC IDENTITYTraditional microfinance has relied on a large network of branches since identity verification has been impossible online and difficult in person. India’s Aadhaar
biometric ID system is leading the world and has enrolled >99% of India’s 1.2 billion citizens. Other countries are expected to follow India’s successful implementation.
www.l-pesa.comL-Pesa Microfinance
Big Data, A.I. & Blockchain
AlterativeCredit Data
MobileTechnology
BiometricIdentity
L-PESA SOLUTIONBroadly available, targeting middle class and small businessOverhead is extremely low; operations are largely automated
Taking advantage of latest technologyLoss ratio well below 10% due to sophisticated underwriting
Using mobile money transfer services like M-PesaIntegration with biometric ID systems
www.l-pesa.comL-Pesa Microfinance
Two years of development by a team of software engineers
Technology is built on Amazon Web Services platform
User experience is mobile and online
User acquisition is via sms marketing and social media
Back office functions in one consolidated system fully integrated with customer-facing system
Back office is highly automated
Heavy reliance on third party integrations
TechnologyL-Pesa has built a highly automated and scalable FinTech platform
www.l-pesa.comL-Pesa Microfinance
UserRegistration
1
UserDocumentation
2
IdentityVerification
3
InitialLoan App
4
SubsequentLoan
Applications
5
Disbursement
6
Repayment
7
UserSupport
8
www.l-pesa.comL-Pesa Microfinance
UserDocumentation
2
IdentityVerification
3
InitialLoan App
4
SubsequentLoan
Applications
5
Disbursement
6
Repayment
7
UserSupport
8
User registers with L-Pesa using their mobile phone. Users must be active with a mobile money service provider such as M-Pesa or Tigo Pesa mobile wallet
UserRegistration
1
www.l-pesa.comL-Pesa Microfinance
UserRegistration
1
IdentityVerification
3
InitialLoan App
4
SubsequentLoan
Applications
5
Disbursement
6
Repayment
7
UserSupport
8
User creates online profile and uploads identity verification documents: Aadhaar number for India, National ID, driver’s license, voter registration, passport, etc.
UserDocumentation
2
www.l-pesa.comL-Pesa Microfinance
UserRegistration
1
InitialLoan App
4
SubsequentLoan
Applications
5
Disbursement
6
Repayment
7
UserSupport
8
L-Pesa staff verifies user identity documents. An initial L-Pesa credit score is assigned
UserDocumentation
2
IdentityVerification
3
www.l-pesa.comL-Pesa Microfinance
UserRegistration
1
IdentityVerification
3
SubsequentLoan
Applications
5
Disbursement
6
Repayment
7
UserSupport
8
User applies for a loan. The initial loan is always $1.00 and in most cases this loan is auto-approved for users who were verified by Transunion and have a score of AA to
JJ. Successful re-payment of this loan improves the L-Pesa credit score.
UserDocumentation
2
InitialLoan App
4
www.l-pesa.comL-Pesa Microfinance
UserRegistration
1
IdentityVerification
3
InitialLoan App
4
Disbursement
6
Repayment
7
UserSupport
8
Subsequent larger loans are auto-approved provided the credit score is sufficient to clear the auto-approval hurdles for the user. A minority of loans are approved manually and loan requests by users considered bad risks are automatically
declined.
UserDocumentation
2
SubsequentLoan
Applications
5
www.l-pesa.comL-Pesa Microfinance
UserRegistration
1
IdentityVerification
3
InitialLoan App
4
SubsequentLoan
Applications
5
Repayment
7
UserSupport
8
Disbursements of funds are handled via mobile money service providers such as M-Pesa and Tigo Pesa. L-Pesa has two accounts or wallets with each provider: a
disbursement account and a collections account. The disbursement account is replenished via transfers from the collections account and is topped up from a bank
account if required to fund new loans.
UserDocumentation
2
Disbursement
6
www.l-pesa.comL-Pesa Microfinance
UserRegistration
1
IdentityVerification
3
InitialLoan App
4
SubsequentLoan
Applications
5
Disbursement
6
UserSupport
8
Users repay their loans in installments (sometimes just one installment for small loans). Repayments are handled via the user’s mobile money service provider and are typically automatically matched in the L-Pesa back office, reducing the open
balance on the loan.
UserDocumentation
2
Repayment
7
www.l-pesa.comL-Pesa Microfinance
UserRegistration
1
IdentityVerification
3
InitialLoan App
4
SubsequentLoan
Applications
5
Disbursement
6
Repayment
7
User support is handled via email, online chat, social media, phone and fax.
UserDocumentation
2
UserSupport
8
www.l-pesa.comL-Pesa Microfinance
TOTALAVAILABLE: 3.2BThe total available
market (TAM) is the 3.2 billion people in Africa,
India and Southeast Asia
MOBILEPHONE USERS
Mobile phone penetration growing
quickly: India is at 92% penetration, many African countries
are > 70%
MONEYSERVICE
L-Pesa relies on mobile money service providers
for disbursements & collections. In India, Aadhaar links with
banks and bank accounts re more
prevalent
AFRICA/INDIA
Initial target is Africa with 170 million mobile money service wallets.
Secondary target is India with 1 billion+ Aadhaar users with
linked bank accounts
www.l-pesa.comL-Pesa Microfinance
The demand is enormous and won’t be satisfied for many years
L-Pesa has spent 20 months refining its user acquisition engine and it’s now highly efficient
150,000 registered users have been acquired, primarily via social media marketing campaigns
Small scale tests have shown that SMS marketing is the most cost effective campaign type
Social media and user referral campaigns will be used to support SMS marketing
Target lists for SMS marketing campaigns are already in hand
The primary purpose for raising outside capital is to fund marketing campaigns
Response rate is expected to exceed 10%
Sales & MarketingL-Pesa has built a predictable and efficient user acquisition engine
www.l-pesa.comL-Pesa Microfinance
The market is so large and untapped that competitors actually help each other with user awareness
Traditional microfinance institutions compete for a small portion of the market
Kiva and similar institutions compete for an even smaller portion of the market
Branch is well funded by top VCs and has a strong team. They target Kenya, Tanzania and Nigeria
Mobile money service businesses may enter the microfinance market in the future
TechnologyL-Pesa has built a highly automated and scalable FinTech platform
www.l-pesa.comL-Pesa Microfinance
2014 2016 2018
20172014- 2017
FUNDINGRon Ezra Tuval has
invested $500,000 to launch and develop
L-Pesa
GROWTH & BARRIERSKenya launched in
August, Uganda and India schedule for 2018.
more countries are pending.
INITIAL LAUNCHTanzania launch after
first version of technology platform is
completed
L-PESA FOUNDEDRon Ezra Tuval foundedL-Pesa in January 2014 after years of planning
CAPITAL=> GROWTHL-Pesa raises equity and lending capital via share
issuance and ICO