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www.l-pesa.comL-Pesa Microfinance

RON EZRA TUVALFounder & Managing Director

I-Pesa International Inc. (incorporated in Delaware)[email protected]

Phone: +97 254 4682519


www.l-pesa.comL-Pesa Microfinance www.l-pesa.comL-Pesa Microfinance

Corporate Domicile

Future GrowthMarkets

Initial Launchin East Africa




Launched to take advantage of market forces revolutionizing finance

First loan issued in Tanzania 20 months ago

Over 150,000 registered users, over 25,000 loans issued

Effective user acquisition engine developed

Loss ratio below 10%


RON EZRA TUVAL

Founder &ManagingDirector

ANDREWLANGAT

KenyaCountryManager

DOMINICGICHOMO

Uganda CountryManager

RIAZLASKAR

Developer

Our TeamGlobal experience, local presence

BOHENRIKSEN

MarketingNinja

DESIREEEDOMO

Copywriter& PR

UTTAMKUMAR

KARMAKARDesigner

AMITABHROYIndia

CountryManager


JAY SILUDSociallyInclinedContentCreator

ANGUALIADANIEL

Legal Counsel,Uganda

MALCOLMNGUGILegal

Counsel,Kenya

BERNARDKIPKURISupport

Our TeamGlobal experience, local presence

MSELEMSAID

Director,Tanzania

SANDIPANPAUL

Accountant

ANALISAMTETEMELA

SupportTanzania

YUNIAWARIOBASupport, Tanzania


History of MicrofinanceBillions of dollars disbursed over hundreds of years

FRANCISCAN MONKS

15th Century

Community-based pawnshops providing financing

for poor farmers

RAIFFEISEN BANKS

19th Century

Cooperative lendingbanks/credit unions

lending to farmers andsmall merchants

MICROCREDIT BANKS

1970s

Lending in poorcountries based on

extensive branch networks

CROWDFUNDING

2005

Non-profitorganizations lendingin limited geographiesusing “field partners”


UNDERWRITINGTraditional consumer and business credit reports used for loan underwriting in developed countries are generally unavailable, and loans without proper underwriting will result in high loss ratios

LACK OF BANK CREDITTraditional bank loans are not available to the vast majority of the population in developing countries

MICROFINANCE TARGETSAGRICULTURE ONLYTraditional microfinance institutions primarily lend to very poor farmers in rural areas. Middle class consumers do not have access to microfinance

OUTDATED OPERATING MODELSBoth banks and microfinance institutions have high overhead, struggle with a lack of data to for loan underwriting, and have generally failed to take advantage of new technology

MICROFINANCE TARGETS THE POOR ONLYConsumers, farmers and small business owners in developing countries above the lowest poverty level have few opportunities to obtain credit

MOST CONSUMERS UN-BANKEDMany of the consumers, farmers and small business owners in developing countries do not have bank accounts

PROBLEMS WITH PROVIDING CREDIT IN DEVELOPING COUNTRIES

Traditional banking or microfinance will never reach even a fraction of the available market


Big Data, A.I. & Blockchain

AlterativeCredit Data

MobileTechnology

BiometricIdentity

BIG DATA, A.I. & BLOCKCHAINNew tools allow for storage of vast amounts of data and extensive data analysis at a

fraction of the cost encountered just a few years ago. Advancements in Artificial Intelligence provide new opportunities for automated loan

underwriting.Blockchain allows for faster, safer and less expensive exchange of value.




MobileTechnology

BiometricIdentity

ALTERATIVE CREDIT DATAJust a decade ago, there was very little data available on most of the people in the

world. This has changed with the advent of social media and related trends.New tools have been developed to make this data useful for loan underwriting

decision making.L-Pesa has developed a unique, proprietary credit scoring model based on user

behavior combined with traditional and alternative credit data.




MobileTechnology

BiometricIdentity

MOBILE TECHNOLOGYThe rise of the mobile phone over the past two decades has been one of the most

profound technological and market shifts in human history. A large majority of humankind now owns a mobile phone, and many own smartphones. Mobile financial services such as M-Pesa have become available in many countries and support both

the banked as well as the unbanked population.




MobileTechnology

BiometricIdentity

BIOMETRIC IDENTITYTraditional microfinance has relied on a large network of branches since identity verification has been impossible online and difficult in person. India’s Aadhaar

biometric ID system is leading the world and has enrolled >99% of India’s 1.2 billion citizens. Other countries are expected to follow India’s successful implementation.




MobileTechnology

BiometricIdentity

L-PESA SOLUTIONBroadly available, targeting middle class and small businessOverhead is extremely low; operations are largely automated

Taking advantage of latest technologyLoss ratio well below 10% due to sophisticated underwriting

Using mobile money transfer services like M-PesaIntegration with biometric ID systems


Two years of development by a team of software engineers

Technology is built on Amazon Web Services platform

User experience is mobile and online

User acquisition is via sms marketing and social media

Back office functions in one consolidated system fully integrated with customer-facing system

Back office is highly automated

Heavy reliance on third party integrations

TechnologyL-Pesa has built a highly automated and scalable FinTech platform


UserRegistration

1

UserDocumentation

2

IdentityVerification

3

InitialLoan App

4

SubsequentLoan

Applications

5

Disbursement

6

Repayment

7

UserSupport

8


UserDocumentation

2


3

InitialLoan App

4

SubsequentLoan

Applications

5

Disbursement

6

Repayment

7

UserSupport

8

User registers with L-Pesa using their mobile phone. Users must be active with a mobile money service provider such as M-Pesa or Tigo Pesa mobile wallet

UserRegistration

1


UserRegistration

1


3

InitialLoan App

4

SubsequentLoan

Applications

5

Disbursement

6

Repayment

7

UserSupport

8

User creates online profile and uploads identity verification documents: Aadhaar number for India, National ID, driver’s license, voter registration, passport, etc.

UserDocumentation

2


UserRegistration

1

InitialLoan App

4

SubsequentLoan

Applications

5

Disbursement

6

Repayment

7

UserSupport

8

L-Pesa staff verifies user identity documents. An initial L-Pesa credit score is assigned

UserDocumentation

2


3


UserRegistration

1


3

SubsequentLoan

Applications

5

Disbursement

6

Repayment

7

UserSupport

8

User applies for a loan. The initial loan is always $1.00 and in most cases this loan is auto-approved for users who were verified by Transunion and have a score of AA to

JJ. Successful re-payment of this loan improves the L-Pesa credit score.

UserDocumentation

2

InitialLoan App

4


UserRegistration

1


3

InitialLoan App

4

Disbursement

6

Repayment

7

UserSupport

8

Subsequent larger loans are auto-approved provided the credit score is sufficient to clear the auto-approval hurdles for the user. A minority of loans are approved manually and loan requests by users considered bad risks are automatically

declined.

UserDocumentation

2

SubsequentLoan

Applications

5


UserRegistration

1


3

InitialLoan App

4

SubsequentLoan

Applications

5

Repayment

7

UserSupport

8

Disbursements of funds are handled via mobile money service providers such as M-Pesa and Tigo Pesa. L-Pesa has two accounts or wallets with each provider: a

disbursement account and a collections account. The disbursement account is replenished via transfers from the collections account and is topped up from a bank

account if required to fund new loans.

UserDocumentation

2

Disbursement

6


UserRegistration

1


3

InitialLoan App

4

SubsequentLoan

Applications

5

Disbursement

6

UserSupport

8

Users repay their loans in installments (sometimes just one installment for small loans). Repayments are handled via the user’s mobile money service provider and are typically automatically matched in the L-Pesa back office, reducing the open

balance on the loan.

UserDocumentation

2

Repayment

7


UserRegistration

1


3

InitialLoan App

4

SubsequentLoan

Applications

5

Disbursement

6

Repayment

7

User support is handled via email, online chat, social media, phone and fax.

UserDocumentation

2

UserSupport

8


TOTALAVAILABLE: 3.2BThe total available

market (TAM) is the 3.2 billion people in Africa,

India and Southeast Asia

MOBILEPHONE USERS

Mobile phone penetration growing

quickly: India is at 92% penetration, many African countries

are > 70%

MONEYSERVICE

L-Pesa relies on mobile money service providers

for disbursements & collections. In India, Aadhaar links with

banks and bank accounts re more

prevalent

AFRICA/INDIA

Initial target is Africa with 170 million mobile money service wallets.

Secondary target is India with 1 billion+ Aadhaar users with

linked bank accounts


The demand is enormous and won’t be satisfied for many years

L-Pesa has spent 20 months refining its user acquisition engine and it’s now highly efficient

150,000 registered users have been acquired, primarily via social media marketing campaigns

Small scale tests have shown that SMS marketing is the most cost effective campaign type

Social media and user referral campaigns will be used to support SMS marketing

Target lists for SMS marketing campaigns are already in hand

The primary purpose for raising outside capital is to fund marketing campaigns

Response rate is expected to exceed 10%

Sales & MarketingL-Pesa has built a predictable and efficient user acquisition engine


The market is so large and untapped that competitors actually help each other with user awareness

Traditional microfinance institutions compete for a small portion of the market

Kiva and similar institutions compete for an even smaller portion of the market

Branch is well funded by top VCs and has a strong team. They target Kenya, Tanzania and Nigeria

Mobile money service businesses may enter the microfinance market in the future

TechnologyL-Pesa has built a highly automated and scalable FinTech platform


2014 2016 2018

20172014- 2017

FUNDINGRon Ezra Tuval has

invested $500,000 to launch and develop

L-Pesa

GROWTH & BARRIERSKenya launched in

August, Uganda and India schedule for 2018.

more countries are pending.

INITIAL LAUNCHTanzania launch after

first version of technology platform is

completed

L-PESA FOUNDEDRon Ezra Tuval foundedL-Pesa in January 2014 after years of planning

CAPITAL=> GROWTHL-Pesa raises equity and lending capital via share

issuance and ICO

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