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Introduction
Silicon Valley Microfinance Network
November 2007
Market Research Shows Strong Demand
“Save the World Enthusiasts”
• “Web 2.0” segment• Young, idealistic,
educated• Often with ethnic
heritage• Energized by global
impact• New to investing
“Socially-Conscious Affluents”
• “Whole Foods shoppers”
• Affluent professionals
• Well-read & traveled• Want to match
lifestyles with values
• The “Oprah” segment
• Older, female skew• Heavy online
researchers• Socially active, but
tend to focus more domestically
“Soccer Moms & Dads”
MicroPlace’s market research has revealed three key target segments:
• Extensive quantitative research tested demand for MicroPlace offering at different interest rates and maturities
• Interested users from our top 3 target segments represent 30% of the online population
• They expressed interest in investing more than $22 billion
• Market potential even greater at higher interest rates and shorter maturities
Source: MicroPlace quantitative research study, December 2006
Microfinance Industry Needs Capital
Source: “Tapping Financial Markets for Microfinance” Grameen Bank USA Paper, 2005, Jennifer Meehan
Figures are in Billions
$0
$50
$100
$150
$200
$250
$300
Current Supply of Capital inMicrofinance
Estimated worldwide demand
• Tremendous success to date. . . – Over 100 million borrowers
– Over $7 billion of outstanding capital
– 97% historic repayment rates
• But global demand for microfinance far exceeds the current supply of capital
• Up to $300 billion needed
• Private capital will have to close the gap – donation capital will not be sufficient
Microfinance Institutions (MFIs): “The Last Mile”
There are approximately 10,000 microfinance lending institutions in all corners of the globe. They need capital to build their portfolios and their long-term sustainability
Community Investing GrowthImpressive Growth in Community Impressive Growth in Community
Investing CapitalInvesting Capital• At the same time, demand for
socially responsible investment opportunities is on the rise
• Community investing growth has taken off
• But, despite the commercial viability of microfinance, there are few investment vehicles available for the everyday retail investor
• And none have been available online, with the backing of a mass consumer marketing engine
• Until now . . .
MicroPlace Mission
To alleviate global poverty by enabling everyday people to make investments in the world’s working poor
Retail Investors
• Lots of capital available for investment
• Looking for new community investment options
• Microfinance has high appeal, low awareness
MicrofinanceFunds/MFIs
• Proven poverty alleviation tool
• Need for billions of dollars of loan capital
• Self-sustaining industry with the ability to provide investment returns
MicroPlace: Connects everyday retail investors with microfinance institutions in need of capital
Investments
Repayment$
$ Investments
Repayment$
$
How It Works
MicroPlace is an investment website that raises capital for microfinance institutions and funds through the sale of securities to U.S. retail investors
Individual Investors Security Issuers
$250
$250
$300
$500
$500,000
$1,000,000
MFIs
$500,000
$1,000,000
• Purchase securities
• Direct investment to MFI of choice
• Receive interest and principal from security issuers
• Registered broker
• Mass-markets to investors
• Assists with investor management
• Create & register securities
• Select / vet MFIs
• Use funds to support MFI loans
• Pay interest and principal to investors
• Borrow funds from issuers
• Use funds to make more microloans
• Pay principal and interest to issuers
(Examples for illustration)
Example Investment
MFI Info
SecurityIssuer Key Terms
Borrowers
Investors purchase a Calvert Community Investment Note, and target their investment to a specific microfinance institution – in this case, TPC in Cambodia
Site Overview
Invest1
Learn2
Manage3
Benefits From eBay’s Mass Marketing Strength
Mass Marketing Strength/Expertise Marketing Plans
Public relations• Seasoned PR executives• Strong eBay press/media contact network
Online Advertising Expertise/Partnerships• Opportunities to advertise on eBay and PayPal,
reaching millions of people• eBay is a huge internet advertiser
Viral (“buzz”) Marketing Resources• Thousands of employees eager to engage
Email Marketing Expertise• World-class campaign management technology
Print Marketing Experience• Opportunities for inclusion in eBay print media
PR• Broad consumer PR campaign to drive
awareness of microfinance and MicroPlace
Online Marketing• Keyword advertising• Graphical advertising
Viral• Launch campaign to jumpstart site• Viral marketing functionality built into site
Email • Ongoing campaigns to existing investors
Print• Inclusion in eBay catalogs
Tell a Friend!
• Spread the word about microfinance and MicroPlace by sending an e-card!
• Free, easy, fun!
• Choose from 6 designs
• No registration required
• www.microplace.com/ecards