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Group Loan Managment

Executive Summary

Three billion people – nearly half the world’s population – live on less than US$2.50 a day. Only about 20 percent of households in developing countries have access to the formal financial sector and many of the rest lack access to credit, savings and mortgages (Shah, 2013). This is a consequence of poor global financial inclusion. Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs. Financial inclusion has been identified as an enabler for 7 of the 17 Sustainable Development Goals (World Bank, 2020).  While the poor don’t have the same access to financial products, their need for financial services may be even greater. Financial inclusion is a key enabler to reduce extreme poverty and boost shared prosperity. Expanding Microfinance Institutions and group lending is one way to increase the financial inclusion.

When individuals from low-income level could not afford collateral for an individual loan, they form a group often called a solidarity group to provide collateral or loan guarantee through a group repayment pledge. The incentive to repay the loan is based on peer pressure, if one group member defaults, the other group members make up the payment amount (IGI Global, 2020). Each group must have a leader or chairperson, a secretary and a treasurer.

Considering the nature of lending groups, they don’t have a high budget for accounting, bookkeeping or hiring an office staff. The group leader is responsible to take care of all above tasks which is time consuming and makes the group lending process more challenging.

With increasing rate of smart phone penetration worldwide, we see an opportunity to provide a smart platform as a service for microfinance loan managers that would facilitate the accounting and loan management process by saving hours of their time and automating the whole process.  Making the process easy and affordable will increase the financial inclusion for many parts of the society that normally they may not have access to formal financial services or not categorized as credit worthy by commercial banks.

The business model for this social venture will be an Entrepreneur support model where our social venture sells business support in form of providing necessary infrastructure and platform to group loan members.

Our solution will use latest cloud base technology and mobile application development methods to provide a robust and user-friendly platform. The combination of using mobile app technology and group lending market being a niche market will differentiate our SaaS (Software as a Service) platform among other SaaS products.

Group lending by nature comes from society and it has a deep root in social network connections. The best marketing strategy for our social venture is Word-Of-Mouth marketing where satisfied customers will advocate our platform.

Despite seeming impossibility several decades ago, financial intermediation among the world’s poor has grown at unprecedented, rapid rates, to the extent that now an estimated two hundred million people have borrowed from a microfinance institution (“MFI”) (Maes and Reed, 2012). There are two main competition groups for our venture. The first group of competitors are traditional commercial banks where they are seeking to attract more borrowers. The second group of competitors are microfinance institutes that offer microfinance loans. These MFI can be considered both as competitors as well as potential future customers.

The revenue stream comes from monthly subscription fees and commissions on each transaction that has been made through the system. The venture would need an initial capital to cover software development and building the app and the required cloud servers rental fees. To promote the application in first phase, the venture will offer free of charge trial usage for three months to customers.

Since our venture is a social enterprise startup, it will deal with both social values as well as financial goals. the leading role for our enterprise would need special multi-disciplinary skills that ensure the venture’s success down the road. The venture will look for seed funding of 600K initially to hire two software engineers. Then we will spend the first six month to develop the initial version of the mobile app with limited options. By this time the venture will start offering the platform free trials to MFI’s or individuals. At this point venture will seek VCs to get financed to expand its business. By end of the third-year number of platform users will get increased up to 500,000 users with 10 Million dollars in revenue.

Company Profile

Business Model

The social venture uses entrepreneur support business model where the venture sells business support in form of providing necessary infrastructure and platform to its customers to facilitate microfinance loans and microcredits.

Legal Structure

The social venture has a for-profit “Social Purpose Business” legal structure. It is a for-profit corporate that utilizes entrepreneurial principles to organize, mobilize and manage a for-profit business that has a social mission at its core to expand the financial inclusion in developing countries by facilitation the group lending.

This venture strives to create “blended value”, a non-divisible combination of financial, social value that in turn generates blended returns.  The venture has “triple bottom line” approach that considers its performance in relation with people, planet and profit.

Mission

The social venture provides loan management services in form of a mobile application with cloud services that would make the whole process of group lending automated and much easier to use for clients. The platform performs all necessary book keepings, accountings and payment collections for loan managers for an affordable monthly subscription fee with a commission base financial transactions model.

Problem Definition

The venture targets developing countries where formal financial services are limited. In such context, formal financial institutes don’t have full coverage to all population and people who have limited access to credit products are main target customers for our venture. When individuals from low-income level could not afford collateral for an individual loan, they form a group loan guarantee through a group repayment pledge. Managing group loans sometime can be a time-consuming task. By using an automated platform, it will be easier for a family, neighbors or friends to create such group and start giving self-loans.

Mobile application technology makes financial services available in the remotest part of the country thus it is the biggest enabler for our venture. With improving technological infrastructure (the Internet, cell phone networks), people are making transactions without any physical contact with an MFI credit officer. As a result, transaction costs have fallen and distance from a physical outlet is no longer a reason for exclusion.

Market request and Need for small microfinance loans is another enabler. Poor people are seeking any opportunity to get better financial services and the best motivation to get them involved in a group lending is to show them a practical working model. Current platform clients will suggest and refer the mobile app to their family and friends. In another word, technique of “word of mouth” marketing will be the best way to attract new clients.

The quality of a service, easy application usage experience, well designed processes are other enablers that help to obtain and maintain new clients. Building good relationships with users and loan managers will help keeping the whole business model sustainable and healthy.

Group lending has been a common practice in many developing countries like India and east Asia. Number of such microfinance credit groups has been increased over past decades and there are multiple reports showing that these microfinance loans has improved people quality of life by giving them financial freedom to cover their child medical expenses, kids’ marriage costs, kids’ education cost or even it had helped them to start their own business and improve the total family income.

Zaman (Zaman, 2001) reported that self-help groups in India, intermediated by microcredit have been shown to have positive effects on women, with some of these impacts being ripple effects. They have played valuable roles in reducing the vulnerability of the poor, through asset creation, income and consumption smoothing, provision of emergency assistance, and empowering and emboldening women by giving them control over assets and increased self-esteem and knowledge. Several recent assessment studies have also generally reported positive impacts. (Zaman, 2001)

Ackerly noted that foundation of credit interventions in Bangladesh was an implicit model which help in empowering women and concluded that women’s access to the market was the primary route for their empowerment knowledge and they are also warned against the possibility of overwork, fatigue and malnutrition were loans used to promote women’s labor involvement without also promoting their market access. (Ackerly, 1995)

However, Schuler (Schuler et al, 1996) had suggested that enforcement of group-based credit programs can trim down men’s violence against women as women‟s lives become more public. They have argued that the problem of men‟s violence against women is deeply rooted.

Montgomery Hulme have found that only 9% of first-time female borrowers were primary managers of loan-funded activities while 87% described their role in terms of “family partnerships‟. By contrast, 33% of first-time male borrowers had sole authority over the loan-assisted activity while 56% described it as a family partnership. They also found that access to loans did little to change the management of cash within the household for either female or male loanees or empower women. (Hulme M., 1996)

Hashemi explored the impact of credit on a number of indicators of empowerment which includes: (i) magnitude of women’s economic contribution; (ii) their mobility in the public domain; (iii) their ability to make large and small purchases; (iv) their ownership of productive assets, including house or homestead land and cash savings; (v) involvement in major decision making, such as purchasing land, rickshaw or livestock for income earning purposes; (vi) freedom from family domination, including the ability to make choices concerning how their money was used, the ability to visit their natal home when desired and a say in decisions relating to the sale of their jewellery or land or to taking up outside work; (vii) political awareness such as knowledge of key national and political figures and the law on inheritance and participation in political action of various kinds; and finally, (viii) a composite of all these indicators. They found that women’s access to credit was a significant determinant of the magnitude of economic contributions. (Hashemi et al, 1996)


The following theory of Change model shows how our platform will change the target customers life. What is the outcome and what is the impact on society.

Solution

Each year International Telecommunications Union (ITU) publishes latest information about world ICT infrastructure. According to ITU 2019 report, 97% of world population lives within reach of a mobile cellular network. (ITU, 2020)

Another report from GSM Association shows that mobile penetration has increased worldwide recently, South Asia and Sub-Saharan Africa two example of regions with developing countries, have mobile penetration rates of 53% and 45% respectively. (GSM Association., 2019).  The same report shows that at least half of these mobile subscribers own an smartphone.

Figure 1 Proportion of Smartphone usage – (GSM Association., 2019)

Our venture solution to increase MFI inclusion is to use smart phone and mobile app as a medium to reach poor people. The mobile app will let poor people to form a self-help groups, where they can create and manage a group lending loan. The mobile application will help people do all the necessary steps of the group lending process online and in an automated way.

This mobile application would take care of sending reminders every month to loan members and collect the loan repayments. It will also create a communication channel between the loan manager and loan members. Each month group would need to choose the next person who can use the loan. The application can help with this part as well in a  automated or a manual way. The mobile app offers following services for customers:

  • Client Recruitment and Application
  • Compulsory Group Training and Group Recognition Test
  • Group Loan Approval
  • Disbursement and Customer Service
  • Collections and Recovery.

Considering the nature of lending group, they don’t have a high budget for accounting, bookkeeping or hiring an office staff. At the end the group leader is responsible to take care of all above tasks which is time consuming and makes the group lending process more challenging as above tasks would need extra commitment and dedication by members.

Business Model

The business model for this social venture will be an Entrepreneur support model where the social venture sells business support in form of providing necessary software and business support services to group loan members and managers with a monthly fee to facilitate microfinance and microcredit loans.

Mobile app has two different access model, the first access level which is designed for loan members is free of charge and no subscription fee is required. However, for loan monthly payment users has this option to directly transfer the fund through their normal bank account to loan manager or use the app money transfer system. if user decides to use App money transfer system, for every transaction there will be a 2% transaction overhead.

The second access level is designed for loan managers, which let them define and customize the loan, add members, define collection policies and perform loan disbursement and customer service.  This level of access is free of charge for loans with up to 3 members. For loans with more than 3 members there are two tires of service with a monthly subscription fee which as it has been shown in following price list table:

Loan SizeLoans with up to 3 membersLoans with 4 to 15 MembersLoans with more than 16 Members
Included ServicesUp to 3 membersMember EnrolmentsGroup Loan ApprovalSupport Email RemindersLoan DisbursementLoan Payment collectionIn-App Members CommunicationBasic Loan Accounting  Up to 15 membersMember EnrolmentsTraining VideoGroup Loan ApprovalSupport Email RemindersSupport Text message RemindersLoan DisbursementLoan Payment collectionIn-App Members CommunicationCollections and RecoveryBasic Loan AccountingProduce Financial Reports24/7 Online Support  Up to 100 membersMember EnrolmentsTraining VideoGroup Loan ApprovalSupport Email RemindersSupport Text message RemindersLoan DisbursementLoan Payment collectionIn-App Members CommunicationCollections and RecoveryBasic Loan AccountingProduce Financial ReportsCustomer ServiceProvide Members Credit Score24/7 Online Support
Subscription FeeFree20$ / Month30$/ Month

Figure 2 – Mobile App Subscription levels and price list

The target market is developing countries with GDP less than 5000$ per year, where local laws and regulations permits the venture operates legally. Target customers are men or women age 18 and over regardless of race, color or ethnic. Although the venture won’t bios the membership enrollment, but we predict that most of the clients will be in range of 25 to 50 years old. We expect almost equal weight of genders among clients. Studies have shown that MFI loans has a considerable positive impact on women empowerment and we expect to get a high attention from female clients. These clients usually don’t have access to commercial credit products or they don’t have a credit score or necessary collateral to be eligible for bank individual loans.

To reach out to more customers, the venture will make strategic partnership with existing local MFI’s in each region by offering free trials. And adopting mobile app feature to MFI’s current day to day need. This will be a great opportunity for the firm to know the market needs from people who has the fist hand experience. Also, these collaborations would help improving app features and debugging potential software hiccups.

The business head quarter is located in Silicon Valley, where company has access to plenty of technological resources including high skill backend and frontend software developers, high tech business partners as well as startup friendly venture capitals.

The venture will have satellite operational offices in different regions like South Asia, Middle East, Africa and Latin Americas to support local business development.

Uniqueness

One would ask what is special with this product and what would stop competitors to enter the same market segment. MFI market is growing market and many commercial companies are entering this market and as a result we predict a high competition. However, none of the competitors so far has offered similar product and no one has used mobile app technology to reduce the costs. As part of mobile app development, we will invest plenty on software security to protect customers financial and identification information. Software security issues in online platforms are regarded as Achillies Hill with many data breach incidents in recent years. Our platform being secure would be another completion advantage over possible future competitors. Developing a robust and user-friendly platform will give us another competition advantage where increase the customers loyalty and it would help the customer retention ratio.

Since there is no similar product available in market, the venture will get advantage of being first to market and it can capture a noticeable market share without spending too much on marketing and advertisement. This will act as a barrier for future competitors since when they come to the market, most of customers are already familiar with our brand, also there will be a high cost of marketing and advertisement for competitors to promote their product.

Marketing Strategy

– Market adoption and sales. Strategy and tactics for penetrating the market and driving sales. Who are your most profitable customers? Why? How will you approach marketing, communications, and sales?

Our social value is to help poor people to get a better financial inclusion. So as part of the Marketing strategy the venture will try to avoid extra unnecessary marketing costs as they would eventually get paid from customers’ pocket and that is against the campaign goal.

The venture marketing plan consist of two approaches, first to make strategic partnership with relevant NGOs, MFIs and Social Enterprises. These partnerships will be in form of integrating the venture platform with partners social activity. In some cases, the service can be provided with reduced cost or for free. The nature od group loan has a root in social networking, making partnerships with different social enterprises will expand the venture networking as well as increasing the market penetration.

The second marketing approach is to use word-of-mouth marketing where satisfied clients would recommend the platform to their networks.  This method is also perfectly aligned with our first partnership strategy and can get benefit of already established user network and branding awareness.

As we stated previously our target market is poor people in developing countries with less than 5000$ GDP per year. MFI’s experience has shown that women in developing countries are one of the best target customers that has adopted the group loans very well and the outcome was very promising.

To see how our Venture will use the strategic partnership, we will explain an example partnership.

Women’s Microfinance Initiative (WMI) is an MFI with mission is to establish village-level loan hubs, administered by local women, to provide capital, training and support services to rural women in the lowest income brackets in East Africa so that they can engage in income producing activities. (WMI, 2020) They started their first operation by providing loan to business ventures in raising chickens, tailoring, buying and selling vegetables and bogoyas, selling cold drinks and biscuits, grinding maize, operating small shops, and growing coffee. Upon receiving their loans, the women indicated that they would use their business profits to pay school fees, improve family meals and for medical care. (WMI, 2020)

Since then their operation has been expanded. In 2107, WMI hit the $5,000,000 lending mark. Roughly 40,000 village-level loans have been issued through the WMI Program. (WMI, 2020)

Our venture will make a strategic partnership with WMI to automate all existing 40,000 loans. Let’s say in average each loan has five members, which means 20,000 new customers for our platform. To make the partnership more affordable for WMI we will give them 50% discount on our 2nd level service which means 10$ monthly subscription or 200,000$ monthly revenue for our venture.

For first two years we target operating in developing countries in South Asia like Bangladesh, India and Pakistan where concept of MFI is well known there are many active group loans borrowers. In these regions the local regulations are more hostile toward microfinance institutes. After three years when company’s operation is more stabilized, we will consider expanding our operation to other regions like Africa or South America.

Our projected customer base for few years is shown in following table:

YearNumber of LoanNumber of clientsSubscription Revenue/Year
First Year * Free or Discounted Membership Fee5,00020,00060,000 $
Second Year * Discounted Membership fee20,000200,0001,200,000 $
Third Year50,0000500,00010,000,000 $

Since the need for small microfinance loans is in a rise worldwide it will help the venture business expansion to reach more customers in upcoming years.

Competition Landscape

There are thousands of Self-Help Groups (SHG) worldwide and many case studies show SHG effectiveness and growth in different countries including India, Middle East, Africa, South America.  In general microfinance and using fintech is on growth and many commercial players has been attracted to this market.  Here I’ll check some statistics information from India one of the biggest showrooms for SHGs:

 In India, approximately 220 million people live in poverty in rural areas., Self-Help Groups (SHGs) have gained considerable traction and scale in India as a grassroots model for improving the livelihoods of India’s rural poor. NABARD’s is one the most famous program in India that supports SHGs. According to a report from 2006, NABARD estimates that there are 2.2 million SHGs in India, representing 33 million members.

Competition landscape includes following players:

  1. Commercial Banks and Credit institutes seeking more borrowers
  2. MFI’s trying to enter or expand their operation in this market
  3. Future Fintech companies trying to clone our solution

Commercial banks historically tend to avoid poor people where there is a high risk attached to individual loans as these individuals may default the loan. Also lack of credit worthiness scores for these target customers discourages traditional bank to invest in this segment. Both mentioned factors won’t affect our venture, since group loans are based on peers guarantee and members also locally know each other.

From another perspective, Since the venture just provides software services, it doesn’t have any financial liability for default loans and loan group is responsible to recover the default loan cost. The second group of competitors are microfinance institutes that offer microfinance loans. These MFI can be considered both as competitors as well as potential future customers. Our Software service can help these MFI’s to reduce their loan management overhead and convert these competitors to customers.

The third group of competitors are future Fintech companies who would want to enter the same market segment. Our venture has the advantage of being first in the market and by the time these Fintech competitors want to enter the market, we already have captured a big portion of the target segment. There are also multiple software development techniques to keep customers loyal and make is unjustifiable to switch to another platform. For example, consider you have been using iPhone for multiple years, then since all your contact information is stored in iCloud and apple data storage ecosystem, it would be hard for you to switch to Android phone. Same concept is applicable when customer has already engaged in our platform and all previous accounting information is saved in our cloud system. However, the main thing that will keep customers loyal is the quality of service they receive from system, so keeping high standard and quality of service is the main insurance that will guarantee the customer retention rate.

External Environment

There are multiple external actors that can affect the venture business size and quality. Local regulations and laws define the limit and the extend of the venture freedom and liability. In recent years there have been several microfinance scandals that have made government officials and lawmakers to be more cautious in regard of MFI operations. Let’s check one of the recent events is India. India’s rapidly growing private microcredit industry faces imminent collapse as almost all borrowers in one of India’s largest states have stopped repaying their loans, egged on by politicians who accuse the industry of earning outsize profits on the backs of the poor. Indian banks, which put up about 80 percent of the money that the companies lent to poor consumers, are increasingly worried that they could face serious losses. Indian banks have about $4 billion tied up in the industry. (Polgreen & Bajaj, 2010) Microfinance in pursuit of profits has led some microcredit companies around the world to extend loans to poor villagers at exorbitant interest rates and without enough regard for their ability to repay. Some companies have more than doubled their revenues annually. The region’s crisis is likely to reverberate around the globe. Now some Indian officials fear that microfinance could become India’s version of the United States’ subprime mortgage debacle, in which the seemingly noble idea of extending home ownership to low-income households threatened to collapse the global banking system because of a reckless, grow-at-any-cost strategy. (Polgreen & Bajaj, 2010)

Beside Political environment any influential local or global conditions can impact MFIs. A high incidence of global disease like HIV/AIDS or Covid-19, a post-conflict environment, seasonal loan cycle (because of agriculture, for example) or market disruptions because of natural disasters are all examples of external environment incidents that can impact our venture’s business.

Following SWOT analysis diagram shows additional Strength, weakness, opportunities and threats.

Management Team and Leadership

The venture will have diversified board of directors with different background and skills including following expertise: Board members with financial management skills, Board members with Public administration and NGO management skills and other members with startup establishing and ICT technical skills. The managing director, Mr. S has the most important role in success of this social startup venture. He has multi-disciplinary skills including expertise on how to get the business off the ground and manage the startup daily routines. With background in electrical and computer engineering he is perfectly equipped with proper technical skill to guide the mobile app development. Also, since he has an MBA degree with previous working experience of establishing an startup, he is well suited to lead venture’s marketing, sales and business growth strategies. He also has experience of being board member for several NGOs which make him a good candidate to define the company social values and ensure the target social impact that company was looking for has been achieved.  

One of the key success factors for the venture would be to make clear and effective communication with business stake holders and clients. The Leadership has a proven record of being an effective and skilled communicator.

Financial Feasibility Study

This venture is financially viable, and it can go to the profit-making phase very quickly. The startup cost is about 600K $ to hire two software developers for platform front-end and back-end development and a part-time graphic and UI designer and to cover the startup manager salary.

One way to get the required funding is to reach out to VCs and ask for Capital. This is feasible, but the amount of share that would get transferred to VC should be in a range that the initial board of directors don’t lose their power in decision making votes. This will insure that founders always have the power to make right decision to make the social impact goal happens and decisions won’t be pure financial base on VC requests.

A better option will be to find VCs that have background in funding Social Purpose Enterprises and they are familiar with social values and required patience down the road.

When the initial Capital is secured, the venture will hire two software developers and make the payment as project deliveries are progressing. Creating a robust and secure platform has the highest priority. The graphic and UI design will get out sourced to contractors and payment will be made upon receiving the project deliveries.

We recommend using crowd-funding platforms to raise a portion (like 10%) of the required capital, using a public crowd-funding campaign has multiple advantage, first of all it provides a portion of required capital without loosing voting power. Second it will create early brand awareness and there is good chance of finding productive networking connections and links with other professional during the process. And finally, creating a crowd-funding campaign will make an official commitment for founders and it will force the team to get prepared in advance for project milestones and Implement an internal discipline and schedule to meet the deadlines.

Evaluation, Impact, and Risk Analysis

Like anything else in the world around us, circumstances can change any time. We understand that a successful plan is the one that has the necessary dynamics to adopt unplanned changes and make those threats to opportunities. Here are few scenarios where things can go against the plan and here are our suggested remedies for the situations:

  • A change in local regulations happens that limits our venture business freedom:

As an international business entity, we always should respect the target market local regulations and laws. To win international markets in current competitive landscape a business should have a high level of flexibility to adopt its business activity and tailor its product for the target remote market. We would review our policies and product design to make sure it satisfies the local government regulation, even if it means less profit for company. We will not forget that, beside financial goals, we also have a social value goals and to achieve that goal we should maintain our presence status in that region.

  • A competitor clones our platform and enters our target market:

No business exists without competitors and identifying a new competitor is not end of the world. Having a competitor means we have a strong reason to improve our product and service quality and bring more values to our client to win the competition.

To win this specific situation, we will think of a new initiative that would differentiate our product and give us a competition advantage. We already have the advantage of being first in the market. if we have kept a good quality of service we can rely on our client’s loyalty to win this battle.

  • A Commercial bank starts giving loans to target market individuals with low interest rate and no required collateral:

We should never forget that our Enterprise has multiple bottom line goals. It is true that a commercial bank entering into our market segment will reduce our profit, but we should not forget that at the end it will increase the financial inclusion for the target poor people and should consider it an external enabler to achieve our final social value goal.

  • We found a data breach within our IT system where customers’ confidential data are stolen:

Like any other business this situation needs a proper crisis management plan and actions. It is true that a big damage has already happen but our honest response to the situation may prevent further collateral damages. As an honest manager we should immediately form a crisis management team with enterprise executives. And communicated the situation clearly with clients. Exposing such incidents to customers usually has negative brand image and it comes with financial penalties. But we should do what is right for our clients. Telling them quickly about incident will give them this opportunity to limit the damage extend by changing their username password or seeking for other kind of credit and identity theft protection means, like credit check freezing.  The next action would be to recover the damage as much as possible. If it is possible, reimburse clients financially in or der make up some part of the damage.

  • A global disaster or epidemic disease disrupt local or global society:  In case of a global epidemic disease, People’s lives are at stake and anything else has a lower priority. In such situation the venture should do whatever it can to make sure its employees and clients have a safer condition. For example, Venture will ask employees to work from home to keep them safe from virus exposure or let clients to sign application remotely to avoid unnecessary travels. If it is possible venture will reduce or remove the monthly subscription fee to help clients in tough financial situation period. Clients will appreciate the venture understanding and when the crisis is over, the brand loyalty has been increased.

Sometimes it can be hard to get everyone in our team to focus on what really matters. That’s where Critical Success Factors (CSFs) can help. Identifying Critical Success Factors enable us to track and measure our progress toward achieving strategic goals and ultimately, to fulfilling the organization’s mission. There are four main types of CSFs: Industry factors, Environmental factors, Strategic factors and Temporal factors. Here are some candidate critical success factors for our venture:

Current Status, Timeline, and Milestones

At this we have spent a full year to complete the market research and the business proposal. We have studied similar venture, their story and their success and failure factors. We have also studied potential competitors and their strength and weaknesses. We need to secure the initial capital fund of 600K to start the mobile app development. to do so we would approach interested venture capitals to secure the seed funding. we will hire two software developer and the initial version of the software will be ready after six months. The software test and validation process will get performed for three months with five different loan groups. In parallel the marketing afford will be done to make a strategic alliance with Women’s Microfinance Initiative (EFI) or a similar organization to start the pilot project of using the app in real world.  By end of the first year it is expected that company has enrolled 5,000 loans with discounted or free subscription term with total revenue of 60,000$ from subscription. The trial offering will continue in second year but with increased projected subscription the total revenue is expected to be 1,200,000$.

By end of the third year, the venture is in its profit-making phase and we expect 500,000 clients with total revenue of 10 million dollars per year. From social value point of view at the end of the third year, the venture has provided loans for 500,000 individuals.

References:

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