Tujijenge Tanzania GSBI 2010 application Exercise Two EXERCISE 2 Section1 Total Available Market of Un-banked in Sub Saharan Africa Segment Size Needs Sub Saharan Africa 563.88 million1 Banking services, reliable energy sources, health care, education Tanzania 20 Million2 Banking services, reliable energy sources, health care, education Dar Es Salaam 1.62 million3 Banking services, reliable energy sources, health care, education Section 2.2 Total Available Market Statement 1) Description: millions of underserved and impoverished people in Sub Saharan Africa, and more specifically Tanzania, who lack any access to financial services, reliable sources of energy, and health care. 2) Characteristics: The bottom of the pyramid, the missing middle, un-insured people needing health care, population not connected to national grid. 3) Needs: consistent source of cash flow, savings mechanisms, education, lighting and other energy needs, health care. 4) How needs are met: A variety of comprehensive products are offered to meet the needs of each individual client. Group loans for the BOP. Solar loans for those in need of light. Health care loans for those without insurance. Individual loans for those seeking to expand their businesses and hire from the BOP. 5) Estimate the size: UN population project 2009 – 863 million people in Sub Saharan Africa * 1% of population with access to financial services (UN microcredit/microfinance Africa 2008) * 2/3 population in need of banking = 563.88 million. Tanzania = 20 million (2006 data from Finscope report on Tanzania). Dar Es Salaam = 1.62 million. (Finscope 2006 report on Tanzania) 1 UN population project 2009 (863M), * 1% of population has access to financial services (UN microcredit/microfinance Africa 2008) 2 Finscope 2006 report on Tanzania 3 Finscope 206 report on Tanzania Alternative Characteristics Cost Size Positioning Group Loans Bottom of the 40% p.a. 1.5m in Customer focused; loan agents pyramid, small Dar go out to field to meet clients. groups guarantee Flexible growth and upgrading repayment systems. Individual Targeting the 40% p.a. 15K in Easy and fast processing. Loans missing middle. Dar Repayment through M-Pesa, Loans for capital free sim cards distributed to investment and net clients. working capital Solar Solar lanterns, Subsidized 35 Partnership with low cost Products, devices sold at by donors, or million4 reliable solar provider D.Light. Charcoal, retail price pay at once. Innovative distribution network Kerosene, without payment $15 - $500 gets product to underdeveloped electricity plans. areas. Payable in installments Charcoal, instead of at once. Kerosene cheap but unhealthy source. Health Full premium Cost of 100K in Strong partnership with AAR Insurance payable once at premiums Dar Insurance, the leading health beginning. $281 – care provider in East Africa. $2,474 Premium can be paid over 2 – 6 months. Non Lack of capital, No cost 20m in Default Consumption lighting, health Tanzania insurance. 2.3 Segment Compelling Reason for adoption Product for Segment Reason for non-adoption of Definition Business Small/micro businesses can Group Loans, Lack of trust in institution. Growth improve production or expand Individual Loans available in area, no relevan businesses, start earning more money to improve home life. Asset Businesses need more working Group Loans, Lack of trust in institution. Acquisition capital, greater inventory. Individual Loans available in area, no relevan Education Parents want to send children to Group Loans, Lack of trust in institution. primary, secondary schools and Individual Loans available in area, no relevan lack the capital. 4 GVEP survey 2009 – 90% of population lacking access to national grid. Health care Families want safety and Health Insurance No knowledge of insurance assurance that they are taken care financing. for today. of in case of emergencies. They can pay back loans regardless of sickness in family. Energy Families and businesses in need of Solar Energy loans Lack of knowledge in syste clean and reliable lighting source. systems unreliable. No sui Entrepreneurs who want to keep repair. Unable to find prod stores open after dark. Parents who want children to study after dark.