Corporate Presentation. MICROFINANCE OGANIZATION B.I.G. Tbilisi, Georgia

Transcription

1 Corporate Presentation OGANIZATION B.I.G. Tbilisi, Georgia

2 0 Contents 1 Key Financial Results YE016 Unique transformation story 4 Pillars: Client Satisfaction, Social Responsibility, Transparency & Financial Sustainability 3 Audited Financial Statements Income Statement Balance Sheet

3 YE 015 ბი აი ჯი 1 Key Financial Results YE 016 YE 016

4 Unique Story Supported by Compelling Themes Leading MFI with in depth local knowledge is one of the leading MFIs in Georgia with an excellent understanding of the local market Unique combination of entrepreneurship and discipline Strong Management with Proven Track Record 8+ years experience in the local microfinance market both at and with other established market players In house training center for loan officers and credit administrators Transparent Corporate Governance Institutional and Social Rating exercises Publicly available audited financials, regular reporting to mix Market

5 Company Overview 3 rd largest MFI in Georgia Operating 10 service centers Serving c. 7,500 clients 47 full time employees out of which 1 loan officers Rated BB-/Stable by MFR, 013 Rated S B by MFR, 015 As of Q FINANCIAL SERVICE PROVIDER (FSP) PERIOD GLP (m'usd) Org. ProCredit Bank - GEO Bank CREDO MFI JSC Bank Constanta Bank FINCA - GEO Bank Crystal MFI MFO BIG MFI JSC Georgian Credit MFI Lazika Capital MFI Microcredit MFI Easycred MFI GeoCapital Microfinance Organization JSC MFI FinAgro 01.8 MFI Alliance Group MFI LTD MFO Capital Credit MFI Source:

6 Outreach Region # of Service Centers GLP, % Tbilisi % Rustavi 1 8.5% Kutaisi % Telavi 1 8.9% Akhaltsikhe 1 6.7% Gori 1 7.7% Senaki 1 5.0% Marneuli 1 3.7%

7 Company Leadership Supervisory Board Zurab Davlianidze Chairman of Supervisory Board Teimuraz Jashi Member of Supervisory Board Zurab Davlianidze has over 10 years experience of working in senior positions in the banking sector. Namely, Zurab has held the positions of Branch Director and Regional Director at leading financial institutions in Georgia. In the last years, he has successfully founded several businesses in finance, construction and manufacturing sectors. He holds a Bachelor's degree in International Economic Relations from Ivane Javakhishvili Tbilisi State University and Master's degree in Business Administration from Caucasus University. Teimuraz Jashi has over 15 years of working experience in the banking field. At various times, he held managerial positions in information technology development as well as corporate banking and credit services at leading financial institutions in Georgia. In recent years, he has established several successful businesses in the financial field. Teimuraz graduated from the Agricultural University in Georgia majoring in Banking and Finance. Giorgi Akhvlediani Member of Supervisory Board Giorgi Akhvlediani has been a BIG Supervisory Board Member since 008. In 1998 he graduated from Ivane Javakhishvili Tbilisi State University, Faculty of International Economic Relations. Over the years Giorgi has established and manages several successful companies in the finance, construction and manufacturing sectors. Management Giorgi Mariamidze CEO Giorgi Mariamidze has 8 years of experience in the fields of banking, insurance and microfinance. Giorgi started his career at the National Bank of Georgia. Within the private sector Giorgi has held leadership positions at financial institutions responsible for reporting, financial and operations management. Giorgi holds a BA with honours in Business Administration and Economics from the American University in Bulgaria.

8 Focus on Client Satisfaction Urban Lending Urban Credit is designed for micro to medium size businesses that operate in urban settings production and retail realization of primary consumption goods, cloth & bijouterie retail stores, special machinery operators. This product is intended for entrepreneurs that have previous experience running similar business and a certain level of own capital. Fast SME Credit is a loan product similar to Urban Credit, but it does not require owners to have previous experience running a business. This product is generally utilized for start-up businesses, but it can be used partially for improving livelihood conditions as well. Auto Credit is a short-term consumer loan product that actively utilized in 009 and 010. Nature of this loan product has also evolved and currently auto credits are disbursed both on the basis of vehicle appraisal and assessment of client s repayment capacity and utilize declining-balancerepayment schedule.

9 Focus on Client Satisfaction Rural Lending Agro Credit is designed for household farmers living in rural areas, since farming is in its nascent stage in Georgia and absolute majority of the households work on their without utilizing hired labour. At this point targets safer areas in the agricultural sector, such as bee-keeping, cattle breeding and small-size greenhouses. offers grace periods for these product in order for the repayment schedule to match the specific cash flow pattern of the agricultural activities our clients are engaged in. The loan can be used for financing any type of farming expenses, including: Purchase of fertilizers and toxics Purchase of farming equipment Renovation of industrial buildings Ketevan Beburishvili has been involved in beekeeping for 5 years. She learned this skill from her father. She independently manages her bee farm and her honey is famous in Telavi and neighbouring villages. She applied to BIG for support in 015 after most of her bees died, and she was left with only 4 beehives from 10. She bought an additional 8 beehives with the loan from BIG and continued doing her favourite thing. "I have a desire to enlarge my business, to direct attention not only to the quality of the honey, but also to the packaging of the product, that's why, I approved BIG's initiative to help me in honey labelling related matters with pleasure" - Ms. Beburishvili said.

10 Focus on Client Satisfaction Innovative Lending & Housing Finance Express Loans is was innovative loan product derived from Active Credit Loan which was introduced to the market in 014. The main comfort is that loan application for this product is filled out on the spot via tablet and is sent to the centralized system, where analysts study the application and take credit decisions. Loan approval process takes short time, ensuring maximum comfort for the client. SMS Loan is an innovative product specially lunched to offer a value to the guarantor for Agro or Business Loans in our institution. SMS Loan has a maximum amount of 500 Gel and a duration of up to a year. guarantor can claim the pre-approved loan via SMS. Address loans is a new housing product that was introduced to the market at the end of 016 and is designed for homeowners that want to finance their house repair and maintenance projects. Address loan helps families and their communities improve their living conditions through providing tailored financing options.

11 Focus on Social Responsibility Agricultural Literacy Responsible Corporate Citizenship Together with development of its agricultural lending, BIG has been focused on supporting household farms and providing them with farming education. BIG regularly issues Agroman brochure and distributes it to population in rural areas where we operate. The brochure is prepared by an in-house agronomist and contains tips and guidance on how to ensure healthy harvest of various popular crops. To further promote necessary farming knowledge, BIG organizes annual trainings on setting up and managing greenhouses for our. The training is led by BIG s in-house agronomist, who discusses latest developments in the area. Such trainings will help our clients to increase effectiveness of managing their farming activities. Farmers also have the opportunity to benefit from recommendations made by BIG's invited agriculture sector specialist anytime. BIG has been an associate member of Georgian Farmers' Association since 016. The Association integrates more than 1800 farmers throughout Georgia. It actively works with governmental, donor and educational institutions and represents a powerful collaboration between farmers and parties concerned with the agricultural sector. BIG participates in the projects implemented for the members of the Association. BIG requires its loan officers to attend responsible sales trainings. The trainings are organized with the support of Savings Bank Foundation and led by seasoned trainers with extensive international experience in the microfinance field. The trainings emphasize the role of responsible financing both in the context of our organization and sustainable economic development in general. BIG is a member of Pro Bono Network, which integrates organizations wishing to share their appraisals with civic organizations, which work on social and environmental matters and encourage their employees for participation in this initiative. BIG participates in provision of consultations and trainings held for the beneficiaries of the network in various viewpoints: business strategic planning and management, finances, marketing, human resources management and other directions. BIG pays special attention to supporting development of Social Entrepreneurship in Georgia, BIG sponsors Students for Social Entrepreneurship project held annually by Europe Foundation and CSR Development Georgia. Project supports competitors with grants and provides periodical consultations to the winner organizations in financial, marketing and legislative issues.

12 Focus on Social Responsibility Environmental Policy Microfinance institution BIG is aware of its responsibility toward environment and therefore developed its triple bottom line approach and intends to contribute its modest part to environmental protection. Social Performance Committee is in charge of monitoring implementation of environmental projects and measuring our impact on the environment. 1 Reducing the internal ecological footprint BIG is willing to improve its environmental performance by taking actions internally, at the institutional level. We seek to improve our waste management. We set objectives and closely monitoring our levels of energy and water consumption, paper use. BIG raises employees' awareness of good practices in paper, water, and energy consumption, waste management. Managing portfolio environmental risks BIG focuses on the environmental impact at the clients level. It consists of screening and monitoring all loans according to environmental criteria. BIG uses an exclusion list, which defines the types of activities that our institution will never finance. 3 Providing environmental non-financial services Our non-financial services include environmental awareness-raising campaigns by organizing specific training sessions for micro entrepreneurs engaged in environmentally-sensitive activities. We also raise community awareness through poster and T-shirt distribution. As part of its social responsibility practices BIG is involved in paper waste recycling project with Coop. Coop is a non-profit social enterprise that aims to develop a sustainable waste and recycling model and raise awareness for the environment.

13 Focus on Transparency Microfinanza Institutional and Social Rating assessments Voluntary reporting to mix Market MicroFinanza Rating (Social) 015 ( S B) MicroFinanza Rating (Institutional) 013 (BB-) Quarterly communication of financial results Publicly available audited financial statements 016 MFI BIG Press release Q3 016 MFI BIG Press release - Q 016 MFI BIG Press release - Q MFI BIG Press release - Q4015 Financial Statements Financial Statements Financial Statements Financial Statements - 01 Financial Statements

14 Miljoni ბი აი ჯი Miljoni Financial Sustainability CONTINUOUS YEAR-OVER-YEAR GROWTH Total Assets 38, 31,6 4,5 17,6 87% 1,7 87% 8,8 91% 5,9 89% 87% 59% 88% ,0 9,0 8,0 7,0 6,0 5,0 4,0 3,0,0 1,0 - NIM Growth 9,3 8,8 6, 4,6 3,7,9,4,6 1,8 1,8 1,1 1,4 0,5 0, Cash & Cash Equivalents Net Loan Portfolio Other Assets Fixed Assets Interest Income Interest Expense

15 Financial Sustainability STRONG REVENUE GENERATION & ABOVE SECTOR PROFITABILITY RATIOS Profitability Key Performance Indicators 140% 10% 100% 80% 60% 40% 0% 0% 116,9% 44,9% 44,8% 40,0% 3,8% 15,4% 17,0% 9,1% 9,6% 11,1% 4,% 5,1% 9,0%,% % 60% 50% 40% 30% 0% 10% 0% 61,9% 50,7% 44,% 41,9% 39,4% 38,9% 36,4% 35,9% 44,0% 33,3% 9,6% 9,% 38,9% 6,% 6,4% 4,9% 7,9% 3,7% 6,0% 6,% 3,3% 4,0% 5,9%,7% 19,3% 16,% 14,5% 16,4% ARoA ARoE Consumer Loans Portfolio yield Risk Adjusted NIM Net Interest Margin Operating expense ratio

16 Miljoni ბი აი ჯი Asset Quality FOCUSING EFFORTS ON GROWTH IN RURAL AREAS Gross Loan Portfolio Portfolio by Products YE % 78% 59% 67% 81% 77% 61% % 1,4% % 10% 39,5%,0% 1,4% % 7. 75% % 88% 89% 88% 77% 35,7% 0 5% 5% 8% 7% 3% % 1% Consumer Loans Urban Loans Agricultural Loans USD, % Auto Loan Urban Credit Active Credit Fast SME Loan Agro Credit

17 Millions Thousands DOWNWARD TREND OF AVERAGE LOAN BALANCE WHILE MAINTAINIG PORTFOLIO QUALITY 10% 8% 6% 4% % 0% Portfolio at risk 4 7,7% 7,0% 6,3% 3 5,3% 5,0% 0,5 0,3 0,3 0,5 0,4 0,3 0,1 0, 1 0,3 0,9 0,9 1, 1, 0, Par 30 Restructured, < Par30 Written Off Par30 + Rest., % Number of Active Clients 100% 80% 60% 40% 0% 0% GLP Maturity 79% Months Average Outstanding Loan Balance ,7% 116,5% 10,5% 114,4% 96,7% 61,6% 54,% 8,6 6,8 7,4 5,4 5,6 5,1 4, Urban clients Rural clients Number of Branches Average Outstanding Loan Balance Average Loan Balance / GNI Per Capita

18 Ownership & Funding Shareholder Structure As of Dec 31, 016, the company s share capital amounted to 1,135,714 GEL, out of which 56% is held by US investor and 44% is held by Georgian partners. 56% 44% US Investor Georgian Partmers Funding Structure YE016 BIG has a diversified funding structure. Approximately 39.9% of funds come from shareholders, whereas 5.%, 8.0% and 6.9% of the total funds come from local banks, Microfinance Investment Vehicles and individual investors respectively. 39,9% 8,0% 6,9% GEL 15% USD 85% 5,% Individuals Local Banks Shareholders MIVs

19 Partners Local Banks International & Local MIVs Other

20 3 MFO, LLC Income Statement ბი აი ჯი (Amounts in GEL) Income Statement 014 Year 015 Year 016 Year Interest & Fee Income 6,65,57 9,411,057 9,970,48 Interest Expense -1,779,90 -,370,308 -,554,603 Net Interest & Fee Income 4,845,670 7,040,749 7,415,879 Other Operating Income 17,041 94,134 33,585 Loan Impairment Charge -75, ,48-494,19 Net Operating Income 4,94,655 6,601,455 7,54,335 Personnel Expenses -1,653,733 -,499,066-3,781,8 Rent Expense -99, , ,709 Depreciation & Amortization -188,45-00,561-8,841 Other Administrative & Operating Expenses -53, ,817-1,18,634 Total Operating Expenses -,665,916-3,941,533-5,756,41 Gain (Loss) from Exchange Rate Difference 104,049 1,03, ,46 Profit before Income Tax,380,788 3,69,369 1,048,461 Income tax expenses -354,70-587,879-66,610 Net Profit,06,086 3,104, ,851 ბი აი ჯი

21 3 MFO, LLC Balance Sheet ბი აი ჯი (Amounts in GEL) Balance Sheet YE014 YE015 YE016 Assets Cash and Cash Equivalents,140,180,77,709 1,963,17 Financial instruments at fair value through profit or loss - 65,1 360,437 Gross Loan Portfolio 0,94,36 7,0,643 3,310,065 Loan loss allowance -191, ,90-435,118 Net Loan Portfolio 0,73,76 6,814,353 31,874,947 Accrued Interest Receivable 485,13 656, ,797 Other Assets 103, ,34 548,791 Property, Plant, Equipment 84,603 97,093 1,990,09 Intangible Assets 119, ,330 10,380 Tax Assets 76,05 105, ,874 Total Assets: 4,500,480 31,637,617 38,00,47 Liabilities and Equity Borrowed Funds 18,795,50 1,986,358 7,817,877 Accrued Interest Payable 41,1 88,409 53,651 Advance payments & Deferred commissions 78, ,37 Other Liabilities 63,4 14, ,63 Tax Liabilities 18,045 79,745 14,674 Total Liabilities 19,08,199 3,60,846 9,77,161 Equity Charter Capital 1,135,714 1,135,714 1,135,714 Retained earnings,310,481 4,136,567 7,005,746 Net profit / (loss) for the period,06,086 3,104, ,851 Total Equity 5,47,81 8,376,771 8,93,311 Total Liabilities & Equity: 4,500,480 31,637,617 38,00,47 ბი აი ჯი

22 CONTACTS ბი აი ჯი ბი აი ჯი Giorgi Mariamidze CEO Tel: (+995 3) Address: 8 Tamar Mepe ave., Tbilisi 011, Georgia Web: Archil Kajaia Investor Relations Officer akajaia@big.com.ge Tel: (+995 3) Address: 8 Tamar Mepe ave., Tbilisi 011, Georgia Web: