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Investor Presentation
About Diamond Finance
19
33
160
2011 2012 2013F
CustomersFounded in 2011, Diamond Finance
LLC is a Non-Bank Financial
Institution that provides loans and
currency exchange services to
individuals and SMEs in Mongolia.
Lending Activity
Loan Type Monthly Rate Avg. Size (USD)
SME/Micro Loan 3.4% $92,500
Consumer Loan 3.6% $7,500
Short Term Loan 4.4% $20,000
86%
8%6%
Current Loan Portfolio
Apartment Collateralized
Car Collateralized
Other Collateral
Typical Loan
Collateralization: 200%
Products: Business Loan
“typically for Micro and SME business owners and enterprises that operate in manufacturing, trade, services, agricultural sectors.”
Maximum Amount MNT 250,000,000 (US$175,000)
Maturity 1 - 24 months
Initial Interest Rate 3.1% - 3.7% per month
Loan Analysis -Analysis of business
-Analysis of proposed project
Repayment Monthly interest payments
Flexible principle payments possible
Grace Period Possible for principal payments
Collateral Mortgage or other assets
Disbursement Cash or bank transfer
• SME Loan
• Micro Loan
Products: Consumer Loan
“for individuals and legal entities that have stable income through operations in manufacturing, trade, services and agricultural sectors.”
Maximum Amount MNT 20,000,000 (US$14,000)
Maturity 1 - 18 months
Initial Interest Rate 1.5% - 4.0% per month
Loan Analysis -Credit analysis
-Income and employment verification
Repayment Monthly interest payments
Flexible principal payments possible
Grace Period Possible for principal payments
Collateral Mortgage, other assets, or up to 6
months salary
Disbursement Cash or bank transfer
• Standard Consumer Loan
• Employee Consumer Loan
Products: Short Term Loan
• Apartment Collateralized
• Car Title Loan
• Car Collateralized
• Old Car Leasing
• Yard Collateralized
Maximum
Amount
MNT 50,000,000 (US$35,000)
Maturity 1 – 12 months
Initial Interest
Rate
4.0% - 5.5% per month
Loan Analysis -Analysis of available collateral
-Analysis of stable income
Repayment Monthly interest payments
Flexible principal payments possible
Grace Period Possible for principal payments
Collateral Mortgage, Automobile, Yard, Other
Disbursement Cash or bank transfer
“high-yield loans for individuals with short term cash flow needs”
Current Position
Key Figures 31th July 2013 (USD)
Total Assets $2.7 million
Gross Loan Portfolio
$2.4 million
Owners Equity $733,765
Return on Equity 43%
Number of Borrowers
64
Average Maturity 6 months
Portfolio at Risk >30 Days
0%
Ownership Structure: Asia Pacific Investment Partners LLC – 100%
INVESTMENT CASE
MACROECONOMIC FUNDAMENTALS
Observed and Forecasted Change in GDP
-5
0
5
10
15
20
2008 2009 2010 2011 2012f 2013f
Mongolia
World
BRIC
Source: World Bank, NSOM, OECD
Inflation
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
0.0%
4.0%
8.0%
12.0%
16.0%
20.0%
Jul-
11
Jan
-12
Jul-
12
Jan
-13
Mar
-13
Dia
mo
nd
Mo
nth
ly R
ate
Infl
atio
n R
ate
While government policy has pushed inflation down, Diamond’s monthly rates have remained relatively constant
Inflation Diamond Monthly Rate
Mongolian Banking Industry
0
2
4
6
8
10
Bill
ion
s U
SD
Banking Industry Assets
Bank Assets
0
50
100
150
200
250
Mill
ion
s U
SD
NBFI Assets
NBFI Assets
INVESTMENT CASE
BUSINESS PLAN
Comparative Performance
27%
36%
46%
Average Loan Interest Rate
Diamond Finance NBFIs Banks
3%
6%
0%
Average Default Rate
Superior Cost Structure and Higher Returns
49%
38% 37%
28%
4.1%8.5%
Diamond Finance
Global Average
Credit Mongol
Portfolio Yield and Net Profit
Yield on Gross Portfolio Net Income
Diamond Finance
Global Average
Credit Mongol
Tax Expense 3% 0.50% 0.90%
Operating Expense 5% 24% 16.70%
0%
5%
10%
15%
20%
25%
30%
Costs
Operating Expense Tax Expense
Growth Forecast
$0.03 $0.19
$1.00
$3.60
$4.48
$0.66
$1.45
$5.00
$8.00
$12.00
$0
$2
$4
$6
$8
$10
$12
$14
2011 2012 2013F 2014F 2015F
Mill
ion
s U
SD
Net Profit Gross Loan Portfolio
Investment Considerations
1. Superior Returns and High-Quality Assets
2. Favorable Macroeconomic Conditions
3. 35+ Years Management Experience
4. Active Oversight by Senior Credit Committee
5. Advanced Lending Technology
6. Powerful Management Information System (MIS)
Investment OpportunityBorrower Diamond Finance Limited, a company incorporated in Hong Kong and a wholly
owned subsidiary of Asia Pacific Investment Partners Limited (APIP)
Lenders Individual lenders with a minimum loan size of US$50,000, increasing in multiples
of US$10,000
Facility Up to US$3 million to be split into three (3) tranches of US$1 million
Term Two (2) years from the end of each tranche close
Repayment In full at the term of the Facility
Margin 1,300 bps per annum
Interest Period 6 months in arrears
Security Package Guaranteed by Asia Pacific Investment Partners HK
Governing Law
and JurisdictionLaws of Hong Kong and subject to the exclusive jurisdiction of Hong Kong courts
Timetable to Close
of Second Tranche4 to 6 weeks
The Guarantor
Asia Pacific Investment Partners (“APIP”) is a Mongolia focused operating group that has a range of subsidiaries primarily focusedaround property development, cement production and financial services. APIP has a strong asset base, which includes one of thelargest and most highly valued landbanks in the country and the only cement producing facility in the capital. This enables APIP tobe exceptionally well positioned to take advantage of what many multilateral institutions expect will be the fastest growingeconomy in the world over the next five years.
The cement factory’s future long term growth is underpinned by a strategically placed limestone deposit and the landbankprovides key sites for APIP’s ten year property development pipeline. To date, APIP has successfully designed, constructed,marketed, managed and fully sold five major residential and mixed-use developments in Ulaanbaatar. It is currently building itsnext two developments. The larger of the two is the the Olympic Residence, which is a mixed-use development with 97 luxuryresidential units and four floors of retail and leisure facilities. The second is the Village at Nukht; a 10,000 sqm plaza consisting ofretail, F&B, office and entertainment venues.
APIP has also successfully obtained a securities and underwriting license and a non-banking financial institution license. AsiaPacific Securities is now one of the most active brokerage firms on the country’s burgeoning stock market and Asia Finance issuccessfully lending to SMEs at up to 4.0% per month. APIP is forecast to return approximately USD65 million in net income for2014.
