wokai

1. www.wokai.org

2. Outline • What is Wokai • How we started • How we developed • What we are today • What we plan to become tomorrow

3. WHAT IS WOKAI

8. The problem 300,000,000

9. The problem 600,000,000

10. The reason • Property Rights • Education • Healthcare • Financial Services

11. The financial services reason • No available financial services • Formal financial institutions • National banks (BOC, CCB, ABC, ICBC) not involved in consumer finance • Rural Credit Cooperatives (RCCs) not tailored to client needs (appraisal fees, difficult repayment structure) • Informal financial institutions • Unfavorable financial terms • Not provide opportunities for start-up businesses • Government poverty alleviation programs • Not finance, only philanthropy • Limited in reach, scale

12. The solution • Microfinance provides loans to the poor • What is it? • Income generating loans • 15-20% interest rates • 1 year loan period • Monthly repayments • Group-guarantee system • Does it work? • 95% loan repayment rates • 300 MFIS since 1994 • 100 active today • 70 million borrowers helped

13. The call for action • China microfinance is limited • Lack of Economic Resources • No regulatory framework • Decreasing financial resources • Absence of Microfinance Ecosystem • Young microfinance sector

14. Our organization • Wokai provides a user-driven microfinance website that connects contributors around the world with borrowers in China

15. How it works Wokai Website Lend Learn Connect

16. Behind the scenes Wokai Website Lend Learn Connect • Front End Wokai posts borrower profiles online Contributors browse profiles, select who to fund, and transfer loan capital to Wokai Wokai distributes loan capital to Field Partners for allocation to borrowers Field Partners disperses loan and then collects repayments and updates over time Once loans have been repaid, Contributors obtain funds back in their My Wokai account Contributors choose new borrower to fund • Back End • Due Diligence Process • Investment Committee • Training Field Partners

17. Behind the scenes Wokai Website Lend Learn Connect • Front End • Content includes research articles, case studies, news, pictures, videos, podcasts • Contributors can upload content • Contributors can rate content • Contributors can share content • Contributors can contact content publishers • Back End • Collect & translate old content • Create new content on MF players, Field Partners, borrowers (Wokai Fellow) • Create blog

18. Behind the scenes Wokai Website Lend Learn Connect • Front End • Connects Field Partners to Field Partners • Connects borrowers to contributors • Connects contributors to contributors • Connects China Microfinance community to US Microfinance community • Back End • Establish & maintain Chapter network • Employ Viral marketing online • Network in US and China

19. Our field partners • CZWSDA - ChifengZhaowudaWomens Sustainable Development Association • Location: Chifeng, Inner Mongolia • Loan portfolio: $1,090,708 • Clients: 3128 • Avg Income: 3,000RMB ($420USD) • Avg Loan Size: $600 • ARDY - Association for the Rural Development of Yilong County • Location: Yilong, Sichuan Province • Loan Portfolio: $842,714 • Clients: 2437 • Avg Loan Size: $620 • Income: 3,000RMB ($420USD)

20. How we help • Short Term: Capital • Year one: • 4 Field Partners • $500,000 • Long Term: Sector Development • Awareness • Information Flow • Transparency • Collaboration

21. HOW WE STARTED

22. Timeline • 2001-2003: Courtney introduced to China & Economics • 2003-2004: Courtney visits China • Sum 2004: Courtney volunteers for Planet Finance and Chinese Academy of Social Sciences (Professor Du Xiao Shan) • Sum 2005: Courtney obtained grant from United Nations Development Program (UNDP) and completed independent field study at Tianjin Microfinance Institution • 2006-2007: Courtney completes Fulbright researching underground financial institutions • Fall 2006: Courtney meets Casey at Tsinghua University • Spring 2007: Courtney & Casey found Wokai

23. HOW WE DEVELOPED

24. Fundraising • June 2006 • Personal Contacts • Dr. Laffer ($10,000) • Casey’s parents foundation ($40,000) • Contacts of Personal Contacts • Omydiar Network • Silicon Valley Angels • Draper Richards Foundation • July 2006 • Personal Contribution • Courtney sells car ($10,000) • Casey donates savings ($10,000)

25. Infrastructure • Beijing • Office • Human Resources • Staff (Director of Field Partnerships, COO) • Volunteers (Penn International Business Volunteers, Harvard Consulting Group) • Legal • Sponsors (O’Melveny & Meyers, Shartsis Friese, Morrisson Foerster, Proskauer Rose) • 501c3, LLC, Contracts, Visas, etc • Financial • Bank Accounts • Salary & Benefits • Marketing/PR • Sponsors (Khaki Creative Designs, Eastwest PR, Yummy Porky) • Volunteers

26. Infrastructure • United States • Establish Wokai Chapters • Recruit volunteers • Reach out to China network • Use Linked In, Idealist, China blog sites • Train volunteers • Fly and present to each Chapter • Vote on leadership positions • Build support network • Provide operational & emotional support • Create information flow & standardization • Maintain contact • Dial-in monthly • Visit quarterly

27. Operations • Beijing • Microfinance • Training • Due Diligence Process • Investment Committee • Edi San (Microvest), Maya Chorengel (Dignity Fund, Unitus Equity Fund), April Rinne (Unitus) • Field Partners • CSZWDA (Chifeng, Inner Mongolia), ARDY (Yilong, Sichuan) • Website • Temporary site • Final site • Phase 1: Lend • Phase 2: Learn • Phase 3: Connect

28. Operations • United States • Develop Chapter Network • Networking • Microfinance Community • Chinese Community • Outreach • Panel Discussions • Event Sponsorship • Committee Work • Grants Committee • Major Donor Outreach Committee • Finance Committee • Marketing Committee • Online Social Media Committee

29. Lessons Learned • Fundraising • Use personal contacts (People are betting on you) • Get skin in the game • Be direct; Be specific • Infrastructure • Develop a good set of PR materials & temporary website • Get sponsors • Operations • Maintain personal contact • Start small • Create structure & ownership (“structured chaos”) • Increase information flow (Dial-in, Basecamp, templates, PR materials) • Encourage group work over individual work • Establish a feedback mechanism

30. Lessons Learned • Technology • Find out what you like • Develop an outline and mock-up • Find a technology assessment team • Establish well-defined contract (milestones, goal-oriented payment schedule) • Break the site into peices • Develop site openly • Don’t be afraid to pull the plug

31. WHO WE ARE TODAY

32. Organization • Headquarters Beijing, China • 4 Wokai staff (CEO, COO, Director of Marketing, Director of Field Partnerships) • 2 Field Partners • 3 US Chapters • 75 Volunteers • Website Phase 1 complete • Completed 2nd round of 100 Beta Testers • Dispersed 150 loans • Launching site at end of November

33. Operations • Building Board of Directors • Choose 2 founding board members • Establish rules & responsibilities • Build board • Fundraising • Launched email fundraising campaign • Develop Major Donor Outreach materials & plan • Develop Chapter fundraising plan • Growing Field Partnerships (4 by end of year 1) • Developing Website • Phase 2 (Learn) • Phase 3 (Connect)

34. Network • Microfinance Players • China Players

35. WHO WE WANT TO BE TOMORROW

36. Our vision • Wokai want to become Asia Society 2.0 2.0

37. Why do people like Wokai? • CHINA

38. How can people connect to China now? • Big organizations • Asia Society • Asia Foundation • Grass roots non-profits • Rural Education • Green Initiatives • Eduaction • Healthcare • Human Rights

39. How can they better connect? • Big organizations • Lack transparency • Lack personalization • Institutions and large donors, not individuals • Aging donor base • Grass roots non-profits • Not sustainable • Not connected • Lack transparency • Individual donors, not institutions • Draining relationships with donors

40. How is Wokai different? • Transparent

41. How is Wokai different? • Young

42. How is Wokai different? • Target all donor types (individuals and institutions) $25 $150

43. How is Wokai different? • Scaleable Chapter Network BEIJING Website SF NEW YORK SEATTLE

44. What does that mean? • Wokai has created a pipeline for connecting back to China

45. Where could this go? • We believe that pipeline can reach more industries than just microfinance

46. How would it work? • Wokai would work with local Field Partners to distribute contributions

47. How would it work? • Wokai • Choose “star” Field Partner in each industry • Establish a P2P system that worked with Field Partner operations • Train the Field Partner on Wokai system • Audit the Field Partner biannually to ensure transparency

48. Why is this good for Wokai ? • Limited growth • Slow loan portfolio growth • Limited long-term scaleability (Field Partners) • Limited userbase • Not all users are interested in microfinance • Limited content • Low borrower diversity

49. Why is this good for China ? • Collaboration • Field Partners • Same industry • Different industries • Contributors • Highly decentralized and unnconnected • Unite those interested in China on one website

50. What’s the plan now? • Focus on Microfinance • Strengthen Field Partners • Grow contributor base • Potentially expand to new industries every two years