Scaling Up Micro Lending in California Disruptive Technology

Scaling Up Micro Lending in California Disruptive Technology

Morning Agenda n Welcome: Lena Robinson n Paradigm Changes: Stanford Microfinance n New Players Panel n Bankers Panel n Lunch at noon n Lunch Keynote: Barbara Vohryzek

Disruptive Technology An innovation that creates a new market and value network, and eventually goes on to disrupt an existing market, displacing an earlier technology.

Disruptive Technology The term describes innovations that improve a product or service in ways that the market does not expect. Legacy organizations can miss the value of a disruptive technology, only to be left behind as the new technology matures and takes hold.

Technologies n Big data and behavioral algorithms n Automated data access & assessment n Cloud-based technology & programming n Online processes n Mobile technology

Changing Norms New technology is not just putting traditional lending processes online. New technology is changing lending norms. • What’s offered • At what price • On what criteria • By whom • To whom • How restructured • How delivered • How quickly

Impact on Microlending n Sophisticated technology available to smaller companies n Technology is changing the profitability of microlending n Bringing new players into the market n Creating new forces, like crowdfunding n Raising new expectations among borrowers

Rapid Expansion n ‘New-paradigm loans’ widely available n Taking hold in the market rapidly

Stanford Micro Finance Group Big Data Meets Micro Finance Online Microlending, Machine Learning and Changing the Market n n Luis Armona Julia Reichelstein

New Players Panel n Tom Green, Lending Club n Brad Lensing, Prosper n Leslie Payne, Lend Up n Paul Quintero, Accion East

New Players Questions n What loan products are you offering? n What is your market, and how do you reach it? n What is your application process? information do you require? n How do you assess clients? n What technologies are you using for marketing, document collection, underwriting and servicing? n How quickly can you fund a deal? n What is your current volume? What

Banker Panel Moderator: Barbara Vohryzek, Governor’s Small Business Advocate n Fred Mendez Rabobank n Lena Robinson Federal Reserve Bank of San Francisco n Herman White San Francisco Fire Credit Union

Afternoon Agenda - Members n Lending Academy n Member Panel Devon Johnson, Women’s Economic Ventures Naldo Peliks, Centro Community Partners n Breakouts n Group Discussion and Survey

CAMEO Micro. Lending Academy Goals Increase microlending, capacity, technology adoption and access to capital. Features: n E-newsletter n Peer Learning n Training n Individual Consulting n Professional Development n Technology Support

Women’s Economic Ventures n Devon Johnson n Microloan Management System (MMS)

MMS Supports lending here Risk Assessme nt Outreac h Applicati on Underwritin g Docume nt Collectio n Closing Credit Memo Servicing & Collections

WEV’s Experience n Doubled deal capacity n Quicker, clearer decisions n Saving time: less upfront admin/touch files less n Invest time after client gives basic info n Time spent on more viable prospects n Could expand with less experienced employee

WEV’s Experience n Not trying to duplicate our previous process n Stepping into MMS: Investing time to understand rationale for particulars, especially required docs, loan amount and underwriting n Giving it a year

Centro Community Partners n Naldo Peliks n Business Toolkit Presentation

Quick Dyads and Group Discussion Find someone who is not in your organization. n What response to these trends should our industry be considering? n What strategic steps could my organization take? n Is there a role for CAMEO to support members adapting to new lending environment?

Closing n Wrap up from Claudia Viek n Please complete your survey n MMS detailed Q&A available after closing

Thanks!!