Microfinance Delta International

Company IntroductionSeptember 2016

Company overview

Company name

Microfinance Delta International Co., Ltd.

Former company established

September, 2013

JV company established

August, 2015

Business Provide microfinance for the unprivileged people in Myanmar

Business area

Have license to operate in 10 townships in Yangon region, and have already covered 6 townships as of now.

Management Taejun Shin(Chairman) U Myint Swe (Managing Director)

Key figures Basic information

As of September 2016KPIs

No.of Borrowers 13,359No.of Branches 5No. of staff 82Loan portfolio(MMK) 1,713,373,800NPL ratio 0.00%

OwnershipLocal shareholders 24.65%Gojo 75.35%

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Organization chart

Board of Directors

Internal Audit Department

Operation Department

IT Department

Finance

Department

HR & Admin Department

R&D

Department

Managing Director Directors Chairman

Assistant General Manager (Operation / Administration)

Regional Manager

Branch Manager

Assistant Branch Mgr

Accountant

Sr Loan Officer

Jr Loan Officer

IT Manager

Finance Manager

Sr accuntant

HR Assistant M&E Officer

U Myint Swe Taejun Shin

Admin Assistant

MIS Accountant

Jr accuntant

Social Performance Management

Committee

M&E Assistant

Finance Manager Assistant

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Vision and Mission & Strategic Positioning

Vision, Mission and Values

Vision Our vision is all low income people have the opportunities to achieve a life free from poverty with dignity and purpose. Mission Our mission is to assist the low income groups to improve their living condition through promotion of self-reliant micro-business opportunities and provision of access to small scale credit. Values Commitment to our clients and their transformation Humility, a spirit of serving in all what we do Integrity, a unity of transparency, accountability and consistency Fairness to serve all people regardless of race, faith and ethnicity

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Our positioning and key milestones

Positioning of MIFIDA We will be the best MFI in balancing social and economic objectives.

Social Milestones Key action items -  Full application of CPP -  Develop the best SPM report -  Develop Beneficiary Welfare Fund -  Staff gratuity fund -  Provide clients insurance program Measurable milestones: -  Keep clients turnover below 10% -  Keep staff turnover below 5%

Economic Milestones -  No. of clients: 30,000 by FY 2017/18 -  ROA: 5% to 10% -  PAR: less than 0.1% -  Average loan size: 400,000 kyats -  Area expansion

-  Ayeyawardy (2017) -  Mandalay (2018) -  Kayin and Mon (2019)

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Methodology of MIFIDA

MIFIDA made a number of modifications to Grameen methodology so that the methodology suits to Myanmar’s specific context.

What we do

Strength of MIFIDA

Area selection

Staff visit the place and assess geographic accessibility, township profile, No. of villages, business opportunity for the people, No. of households, No. of low income households etc.

MIFIDA staff ask local community leaders to convene a meeting of the villagers U Myint Swe and the others make a presentation about MIFIDA

Clients form 5 members group, whose members should satisfy certain conditions (having permanent resident, the group members know well each other, mainly women, etc.)

Can hire branch managers and local staff are from local community

U Myint Swe, the Managing Director is the country’s best microfinance story teller enabling the clients be confident in MIFIDA

Group member requirements uniquely designed for screening

Rocket start of the business after opening the new branch and we avoid the over lapping problem in implementing area.

Twice the number of attendees apply for loan from MIFIDA (the attendees take their neighbors)

As clients carefully form the group by themselves, loan officers can minimize the cost for loan assessment

Promotion Group formation

MIFIDA Loan Operation

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What we do

Strength of MIFIDA

Disbursement

MMK 200,000 / 1 year loan for each of the group to be provided in the loan disbursement meeting in branches or places nearby

Clients get together in the center meeting to pay the money.

The clients can get MMK 100,000 additional loan after the six month; In the second cycle, the clients can get MMK 300,000 and 200,000 additional loan

Customized disbursement policy (paying at branch, paying in front of the other clients, etc.) to strengthen solidarity and transparency

Customized “non-stressful” weekly collection methodology to “Let the clients pay affordable money”

Gradual loan balance increase to let clients accustomed to the larger loan balance

Less fraud and skepticism among clients

No delinquency No stressful working environment for loan officers and thus low turnover

No delinquency and gradual improvement of profitability

Collection Next cycle

MIFIDA made a number of modifications to Grameen methodology so that the methodology suits to Myanmar’s specific context.

MIFIDA Loan Operation (continued)

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Product development

Microcredit Loan Product

We regularly survey clients’ demands and request to make them satisfied and at the same time, we take careful not to disburse loan size for the clients to keep the sustainable relationship between them and us.

Initial After 6 month TotalBusiness Loan1st Cycle 200,000 100,000 300,000

2nd Cycle 300,000 700,000 to 1,200,000 700,000 to 1,200,000General loan 300,000 200,000 500,000

500,000 to 1,000,000 500,000 to 1,000,000

3rd Cycle 400,000 700,000 to 1,700,000 1,100,000 to 2,100,000General loan 400,000 200,000 600,000Micro enterprise loan* 500,000 to 1,500,000 500,000 to 1,500,000

Other LoanEducation Loan 100,000 - 100,000Emergency Loan 100,000 - 100,000

* Micro enterprise loan is provided to clients whose business has relatively large growth potential

Micro enterprise loan*

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Review of the first 1 year

MIFIDA is growing rapidly because of the huge demand of the market and good operation methodology of MIFIDA

0 1,400 1,450 1,470 2,818 3,499 4,813

6,983

8,938 9,934

10,056 11,122

12,065 13,359

Sep. 2013, founded. The capital size was 100million MMK!

Key events since the establishment and total number of borrowers

August 2015,!Gojo invested 400K USD, and re-started as a JV company whose ratio between local and Gojo was 66.6%: 33.3%!

Dec.2015!Opened Branch3, and additional equity funding about 400million MMK from Gojo and local shareholder including new faces.!!

Feb.2016!Opened Branch4, and additional equity funding about 300million MMK!

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Change in the key figures in the last 1 year

10

55

82

Sep 15 Dec 15 Sep 16

170 581

1,713

Sep 15 Dec 15 Sep 16

1,470 4,813

13,359

Sep 15 Dec 15 Sep 16

183

184

326

Sep 15 Dec 15 Sep 16

Loan Portfolio (MMK million) Number of Staff

Clients / Loan Officer Number of Borrowers

10.0x 8.2x

9.1x 1.8x

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Break-down of the reason of growth

Market Potential

Funding

Recruiting (Organizational Capability)

Category Review of the last 1 year

•  Steady economic growth prospect thanks to the market opening

•  Less than 30% of the adults have access to financial service; huge growth prospect

•  After forming JV with Gojo, MIFIDA had about $1 million funding so that it can grow rapidly.

•  Experienced an unexpected stop of the further funding which hampered the growth

•  MIFIDA succeeded in hiring new staff quickly to be poised to grow faster

•  Since they have old colleagues in MIFIDA they easily fit in the new work place and the methodology

•  MIFIDA methodology allows the staff to work under stress-free environment (appropriate workload and no delinquency)

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