www.wokai.org
Jan 14, 2016
Outline What is Wokai
How we started
How we developed
What we are today
What we plan to become tomorrow
The reason
Property Rights
Education
Healthcare Financial Services
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
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
The call for action China microfinance is limited
1. Lack of Economic Resources
— No regulatory framework
— Decreasing financial resources
2. Absence of Microfinance Ecosystem
— Young microfinance sector
Our organization Wokai provides a user-driven
microfinance website that connects contributors around the world with borrowers in China
Behind the scenes
Front End
Lend ConnectLearn
Wokai Website
1. Wokai posts borrower profiles online
2. Contributors browse profiles, select who to fund, and transfer loan capital to Wokai
3. Wokai distributes loan capital to Field Partners for allocation to borrowers
4. Field Partners disperses loan and then collects repayments and updates over time
5. Once loans have been repaid, Contributors obtain funds back in their My Wokai account
6. Contributors choose new borrower to fund
1. Wokai posts borrower profiles online
2. Contributors browse profiles, select who to fund, and transfer loan capital to Wokai
3. Wokai distributes loan capital to Field Partners for allocation to borrowers
4. Field Partners disperses loan and then collects repayments and updates over time
5. Once loans have been repaid, Contributors obtain funds back in their My Wokai account
6. Contributors choose new borrower to fund
Back End
Due Diligence Process
Investment Committee
Training Field Partners
Due Diligence Process
Investment Committee
Training Field Partners
Behind the scenes
Front End
Lend ConnectLearn
Wokai Website
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
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
Collect & translate old content
Create new content on MF players, Field Partners, borrowers (Wokai Fellow)
Create blog
Behind the scenes
Front End
Lend ConnectLearn
Wokai Website
Connects Field Partners to Field Partners
Connects borrowers to contributors
Connects contributors to contributors
Connects China Microfinance community to US Microfinance community
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
Establish & maintain Chapter network
Employ Viral marketing online
Network in US and China
Our field partners CZWSDA - Chifeng Zhaowuda Womens
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)
How we help
Short Term: Capital
— Year one:
o 4 Field Partners
o $500,000
Long Term: Sector Development
— Awareness
— Information Flow
— Transparency
— Collaboration
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
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)
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
Infrastructure United States
— Establish Wokai Chapters
• Recruit volunteers
o Reach out to China network
o Use Linked In, Idealist, China blog sites
• Train volunteers
o Fly and present to each Chapter
o Vote on leadership positions
• Build support network
o Provide operational & emotional support
o Create information flow & standardization
• Maintain contact
o Dial-in monthly
o Visit quarterly
Operations Beijing
— Microfinance
• Training
• Due Diligence Process
• Investment Committee
o Edi San (Microvest), Maya Chorengel (Dignity Fund, Unitus Equity Fund), April Rinne (Unitus)
• Field Partners
o CSZWDA (Chifeng, Inner Mongolia), ARDY (Yilong, Sichuan)
— Website
• Temporary site
• Final site
o Phase 1: Lend
o Phase 2: Learn
o Phase 3: Connect
Operations United States
— Develop Chapter Network
• Networking
o Microfinance Community
o Chinese Community
• Outreach
o Panel Discussions
o Event Sponsorship
• Committee Work
o Grants Committee
o Major Donor Outreach Committee
o Finance Committee
o Marketing Committee
o Online Social Media Committee
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
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
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
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)
Network Microfinance Players
China Players
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
How can they better connect? Big organizations
— Lack transparency
— Lack personalization
— Institutions and large donors, not individuals
o Aging donor base
Grass roots non-profits
— Not sustainable
— Not connected
— Lack transparency
— Individual donors, not institutions
o Draining relationships with donors
How is Wokai different? Target all donor types (individuals and institutions)
$25
$150
Where could this go? We believe that pipeline can reach more industries than just microfinance
How would it work? Wokai
1) Choose “star” Field Partner in each industry
2) Establish a P2P system that worked with Field Partner operations
3) Train the Field Partner on Wokai system
4) Audit the Field Partner biannually to ensure transparency
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
Why is this good for China ? Collaboration
— Field Partners
o Same industry
o Different industries
— Contributors
o Highly decentralized and unnconnected
o Unite those interested in China on one website
What’s the plan now? Focus on Microfinance
— Strengthen Field Partners
— Grow contributor base
Potentially expand to new industries every two years