Updated as of May 15, 2008

MFI Update
Ver 080515

Maybelle Santos
Sr Manager – New Business Streams
e-mail: mmsantos@smart.com.ph

1
 Updated as of May 15, 2008

PLDT/SMART Group as an Enabling Partner

• PLDT Group as Philippine’s most valuable and best

managed company. (Approx P100B Revenue @ 2007)
• Serving 34+ Million on fixed line, mobile, broadband
users
• Largest & robust mCommerce play – 11 Million txs/day
• Pioneering m-Commerce since 2000
• Banking and Regulatory Body Oriented Solutions
• Systems built, designed & operated by bankers
• Significant mCommerce R&D resources
• Innovative & Relevant Community Solutions

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 Updated as of May 15, 2008

Impact of Telco to Economic Development

McKinsey & Company 2008, Realizing Full Wireless Potential Impact of Wireless and Drivers for
Higher Penetration in Developing Countries”

“authors lay out their analysis, revealing that estimates of wireless telecom’s contribution to
GDP are typically understated by at least 75%. In addition, penetration rates are primary
driver of this contribution; in fact, a 10% increase in penetration would boost GDP by .38%-
.68% in China, the Philippines, and India”

World Bank - Mansell (2001), Navas-Sabater (2002)

“research suggests the internal rate of return generated by telecoms investment in

developing countries of around 20%. There is also evidence that telecoms rollout is
linked with higher levels of foreign direct investments”

infoDev Mobile Payments 2007

“of the estimated 8million OFWs working overseas, over 1 million are using the SMART
Padala service to transfer almost U$50 million per month into the Philippines economy”

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 SMART Centers = New Business Models – Updated as of May 15, 2008

Phase I “eLoad, Smart Money Cash Management”

eLoad System

Purchase E-
Load via SM or
PO
x% Discount

eLoad Wallet

Prepaid Systems

Major Dealer y% Discount

eLoad Wallet 4. Top-up Confirmation

Retailers sell to
3. credit
subscribers @
Subscriber’s
Net Value z% markup
account
Sub-Dealer

Retailer Wallet
(eLoad)
2. Initiate

Retailer
Micro-ending 1. Cash Payment Subscribers
Working capital
4
BANK
 Updated as of May 15, 2008

mCOMMERCE Ecosystem

Places to Spend, Products & Sources of Funds

Withdraw, Transfer, Services to Sell,
Load Pass along or
Trade
5 Smart Money Banks
32M Smart Subs

Manufacturing, Megalink/Bancnet/Express
>1M Smart Retailers
Distributors,
Dealers Credit Card Gateway
3K Fulfillment Centers
Retail Smart Money
30K Merchants
Smart Money Reloading
Mobile
600+ Bank Branches Commerce
Corp Smart Money
Engine

6000 ATMS SMART Billing System

>11 Million
Txns/Day
PLDT Billing System
WWW
5
 Updated as of May 15, 2008

SMART Centers = New Business Models –

Phase 2 “Building Eco-Systems”

Retailers SmartBro / Smart Money

• eLoad
• Smart Money Services
• Public Calling Office
• Internet Services

• Microfinance Solution
• Product Aggregation

• From Phone to PC interfaces

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 Updated as of May 6, 2008
Microfinance - Ecosystem
• Reduces security risks in manual cash collection
Manual process
• Enables Loan Officer to focus on other targets
Electronic/mobile
• Provides real time end of day transaction monitoring
for branch and head office

RETAILER BORROWER
RELOAD SMART MONEY – W2W

PAYMENT

W2W IPAY IPAY W2W

APPLICATION APPLICATION

SARI-SARI STORE MFI BRANCH / MFI HEAD OFFICE BORROWER

MFI BRANCH
U2 OUTLET
PAYMENT

RELOAD SMART MONEY

• Access to pre-approved MFI loan on e-load

• ICT enabled loan disbursement & collection
at an interest rate lower than typical MFI loans
• Reduced cost on transport and access
• Transitions to Smart Money conversion point
for MFI borrowers paying micro-loans on mobile
• “Franchised MFI Store”
 Updated as of May 15, 2008
Microfinance Programs & Objectives

ROLE OF MFI’S
MICROFINANCE INSTITUTIONS PROGRAMS 2008 2008 TARGETS

Source of Fund Smart Centers

Program & Solutions 40,000
Loan to borrowers
Fee for transaction reports MFI Retailer Program
Business cost for capacity building • e-load retailing for MFI MFI Borrowers
borrowers (new subs)
Creation of SMART Centers
• exclusively merchandised 130,000
Controlled network
stores
Customized deployment
Community based MFI Partners
MIMO (money in/out) 6 of the Top 8
Learning & Change Management • local conversion points for
Peer support role micro-payments, Revenue
Increased acceptability encashment and distribution e-Load sales
Community & Nation Building P200/day/store
Microfinance Solution
Direct impact on geographic area • mobile enabled loan
Increased ICT knowledge of partner Smart Money
distribution & collection P2.5/week/retailer
Access to tools
on Smart Money
Mobile Loan
P2.5/week/borrower
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 Updated as of May 15, 2008
MFI Retailer Performance (Pilots)
1200 Revised fund distribution IPAY - head ofc to branches , Php1,800,000
W2W - branch to retailer
Php1,600,000

1000

Php1,400,000

800 Php1,200,000

Php1,000,000

600

Php800,000

400
Changed e-load Php600,000
distribution
from MPAY to U2
Php400,000

200

Php200,000

0 Php-
Nov '07 Dec '07 Jan '08 Feb '08 Mar '08 Apr '08

Nov07 Dec07 Jan08 Feb08 Mar08 Apr08

Retailers 42 50 150 475 399 411
Ave Txns 51 74 704 1,304 890 1,047
Amount (Php
(Php)) 76,007 110,250 1,055,699 1,551,190 1,335,591 1,570,736
Ave Sales /Mo 1810 2205 7038 3266 3347 3822
Earning (12% 217 264 845 392 402 459 9
 Updated as of May 15, 2008
SMART Centers = New Business Models –
Phase III “PC, HSDPA, Money Driven”

PC, HSDPA, Money Driven

Retailers • Trading Post Model

• eTupperware Services

• eTutoring Services

• eLearning Services

• eTesting Services

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 Updated as of May 15, 2008

MFI Update
Ver 080515

Maybelle Santos
Sr Manager – New Business Streams
e-mail: mmsantos@smart.com.ph

11