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Ujjivan Financial Services An Urban Microfinance Institution February 15th 2008.
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Microfinance a panacea for poverty alleviation?Impact evaluation of Microfinance in Andhra
50% +30% 020% -
EducationHealthcareBasic Infrastructure
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Microfinance
Major tool for poverty alleviationUrban poor household average borrowing
Rs.50K frpm multiple sourcesServicing debt one of the biggest items on
the income statement of the poor.
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Can Microfinance exist without revolutionary cost saving?MFI Cost Structure:
Borrowing Cost- 12%Operating Cost- 10%Bad Debts &Return on Capital- 2%
Lending Rate- 24%Borrowing Cost- Regulatory IssueOperating Cost- Process & Technology
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Microfinance - Technology
Back-end: Homegrown-not robust Cut & Paste banking software
solution-expensiveFront-end: Experimental – Handheld devices &
mobile phonesCommunications: Issue for remote rural areas
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New Frontier 600 million working poor in the next 20 years
for financial institutions & IT service providers. New Solutions taking advantage in the
tremendous advances in technology in the last two decades.
1. Back-end – Robust systems which can handle very large volumes in cost effective manner.
2. Solutions which reduce depence on cash.3. Solutions which take advantage of the great
leaps in communication technology.
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The Prize
Those who are able effectively serve the 600 million working poor will be the new leaders of the financial service industry in the next 20 years.
Remember: Hindustan Levers sells 70% of shampoos today in sachets.
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Thank you very much for your time and interest!
Thank you very much for your interest and time.
Samit Ghosh
www.ujjivan.com