MIT Mobile Monday PresentationNovember 2009

Your Micro-Business Partners

Executive Summary

The Problem : Microfinance loans are often misused, causing borrowers to fall into a cycle of debt

The Solution : Lending a franchise or a business in a box reduces this risk while providing new skills to the franchisee

The Market : With high poverty rate and high mobile penetration, Indonesia is the ideal place for a mobile phone franchise

What we do: We deploy business kits that enable franchisees to sell electronic airtime / “minutes”

Our progress: We have created over 600 profitable franchisees

What’s next: We plan on leveraging our network to deploy other services such as healthcare, education, retail, and agriculture

Microfinance loans are often misused, causing borrowersto fall into a cycle of debt

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What happens after cash is disbursed?

Traditional businesses

Consumption

Gambling, theft, etc

Potential problems

No new skills gained

Potential to fall into a cycle of debt

Unnecessary interest payments

The Problem

Lending a franchise or a business in a box reduces loan misuse while providing new skills to the franchisee

Donors

• Donate money to sustain livelihoods

Microfinance

• Lend money to start a business

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Microfranchise

The Solution

• Lend cash to start a business

• Lend a business to generate money

With a high poverty incidence and high mobile penetration, Indonesia is an ideal market for a mobile phone franchise

Source: World Bank, CIA database

120 million out of 250 million Indonesians live with under $2 per day

140 million people are mobile phone subscribers

Incidence of Poverty in Indonesia Operator Millions of Subscribers

The Market

“Business in a Box”

CDMA phone with ability to sell electronic airtime for all 11

mobile operators in the market

*Materials provided by Bakrie Telecom

Operating manual, transaction log, price list,

other tools

Promotional Banners and Flyers

Ruma deploys business kits that enable franchisees to sell electronic airtime / “minutes”

What we do

Ruma receives revenue from the sale of the kit and airtime

• Reduces the risk of misuse of funds

• Borrower gains new skills

• No unnecessary interest

• Franchised business provides more stable income

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Borrower sells prepaid airtime

• MFI leases kitsRuma trains borrower

Ruma sells franchise kits

$Profits used to repay loans

Ruma obtains a margin for each airtime sales

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BenefitsHow it works

What we do

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Name: Ibu Yanti

Location: Remote Area in West Java, Indonesia

Primary Business: Small convenience stand (warung)

Her story:• Ibu Yanti & her husband Pak Tisman own & operate a

warung with ~20 products and vegetable stand• Ibu Yanti & Pak Tisman have a five year old daughter• The technology business delivers steadiest cash flow of

all lines of business, providing ~$1/day in extra income on a consistent basis (50% overall increase)

• Additional income is used to expand inventory

$ 2.37 $ 3.71 $ 4.08 $5.70

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Estimated profit* (USD / week)

Week

Franchisees believe that the biggest benefit is the steady cash flow to supplement their existing business

What we do

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Achievements Secured funding from Grameen and Qualcomm Created more than 600 new micro-businesses 100% profitability for micro-business owners 97% of micro-business owners are women 68% of micro-business owners were below the

World Bank poverty line datum of $2.50/day when they adopted the business

Priorities Moving Forward Financial: empower 5,000 of the poor and

poorest by August 2011 to reach financial sustainability as a social enterprise

Social: reach target of 70% below poverty line Deploy new franchise product line by Q4 2010

Ruma has created over 600 profitable franchisees

How we’re doing

Agriculture and fisheries

• Connect farmers with buyers and suppliers

• Sell low availability products

• Give weather information

Trade and distribution

• Build a franchised village shop

• Create POS visibility

• Create a mobile marketplace

Medical products & services

• Deliver basic medical products

• Build Teledoctor service

• Integrated medical alert system

Education and training

• Sell writing utensils, books

• Use the phone as interactive training tool

• Provide basic information services

We plan to deploy new business kits in Q2 2010

What’s next

Take aways

Microfinance is a good proven tool to alleviate poverty, but it can be improved

The phone is the most feasible platform to enable affordable delivery of products and services to low income households

Standardizing/Franchising increases the probability that a micro-business will be profitable

If you have ideas, want to help, or have money, email me at : aldi@kiva.org

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