Vision and Mission. What we do. Origin of the Company Name

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2 Who we are Vision and Mission We aspire to create a world in which everyone has an opportunity to overcome one s own destiny and attain a better life. Our first mission is to be the Private Sector World Bank providing financial access for everyone in developing countries. We aim to reach out to more than 100 million people in all continents by the end of What we do First, we establish or acquire shares of microfinance institutions around the world. Second, through the subsidiaries, we provide quality financial services for the poor. Third, we develop and provide innovative services by leveraging the multinational coverage. Origin of the Company Name The company s name is from an early credit union known as Gojo-ko ( ), established by an agricultural pioneer, economist and philosopher Ninomiya Takanori (, ). Gojo is not a person but a term referring to the five East Asian virtues of benevolence, righteousness, propriety, wisdom, and integrity, which we believe are the foundation of financial services. 2

3 Founders Taejun Shin Founder and CEO After graduating from Korea University and Waseda Graduate School of Finance, Taejun started his career at Morgan Stanley and then worked for Unison Capital. While working in the finance industry, Taejun founded Living in Peace, an NGO, in 2007, and created the first microfinance investment fund in Japan s investment history in Taejun cofounded Gojo in 2014 and has led the company in management, investor relations and investment. He was the Global Shapers of the World Economic Forum and became the youngest founding member of Endeavor Japan. He is the author of 9 books, a finisher of the 1648 km ultramarathon and is fluent in Japanese, Korean and English. Sanjay Gandhi Co-founder and Head of Investment Sanjay qualified as a Chartered Accountant before graduating from Delhi University. His first job as an Audit Manager was with the Indian Associates of KPMG. After working for a finance company, he joined the microfinance industry in 2003 and has worked in 25 countries and conducted about 125 ratings of MFIs; some of the assignments were for the World Bank, ADB, UNDP, Mercy Corps and HIVOS. After his CEO assignment at a Cambodian MFI, Sanjay cofounded Gojo and has conducted due diligence of all its potential partner MFIs. Sanjay speaks English and Punjabi. He is very fond of music, movies and reading, with The Beatles as his all-time favorite music band. Tsuyoshi Nagashima Co-founder and Head of Administration Tsuyoshi is a Japanese Certified Public Accountant and Certified Tax Accountant. Having graduated from Waseda University, Tsuyoshi started his career at Deloitte Tohmatsu and worked for a financial industry auditing team. After Deloitte, he joined an independent accounting office and engaged in financial and tax due diligence, valuation, tax consulting, financial advisory, etc. While working as a professional, Tsuyoshi is a serial entrepreneur, founding an IT consulting company in 2013 and a web app development company in At Gojo, Tsuyoshi leads software development and takes care of all of its back office tasks. Tsuyoshi speaks English and Japanese and loves Indian movies. 3

4 Who we are (continued) Board & Committee Members Nobuyuki Idei Masahiro Kotosaka Taejun Shin Mangyo Kinoshita Director & Chairman; Former CEO at Sony Director; Associate Professor at Keio Representative Director & CEO Audit & Supervisory Board Member; Founder of a law firm southgate Capital $20 million Advisory Board Members Ryoichi Arai Yoko Ishikura Jun Uno Masaaki Tanaka Yo Takeuchi Former CIO, JP Morgan Asset Management Japan Professor Emeritus of Hitotsubashi University Professor, Waseda University Former Representative Director & Deputy CEO, Mitsubishi UFJ Financial Group CEO, All Nippon Asset Management; Former CFO, Development Bank of Japan Auditor Deloitte (Gojo and all of its subsidiaries are audited by Deloitte or its member firms) 4

5 What is microfinance? Microfinance is small-scale financial services for low-income households who lack access to the formal banking sector. Microfinance institutions ( MFI s) have provided financial inclusion to a large segment of the population that is excluded from mainstream banking. Loan officers of MFIs visit the rural villages and provide financial services Typically, loan disbursement and collection take place in the clients for the low-income people. Typical microfinance services are loan, meeting center. This enables the loan officers to meet many clients at the saving, insurance and money transfer, among which loan (microcredit) is same place and better understand their clients lives. With other clients best-known to the world. (photo taken in Cambodia) watching and peer pressure, it also helps encourage everyone to repay their loans. (photo taken in Myanmar) 5

6 The majority of the microcredit is spent for starting or expanding the business. Clients of MFIs engage in various activities, and some of them grew their business to small/middle enterprises. Buy woods and make souvenirs for tourists (Sri Lanka) Working capital to run a restaurant in a village (Myanmar) Buy a sewing machine to produce more cloths per day (Myanmar) Working capital to run a local retail shop (Cambodia) Capital expenditure to expand the cloths production with several employees (Sri Lanka) Capital expenditure to make a small weaving factory (Cambodia) 6

7 What is microfinance? (continued) Social Impact of Microfinance Microfinance has brought about social impact on the local communities through providing financial services to uplift the social status of the clients. The three biggest contributions were (1) access to capital, (2) cash flow management and (3) women empowerment. Access to capital Cash flow management Women empowerment After Before Microfinance provided the people with access to capital by which the lowincome people start or expand their business and accelerate their income growth. Thanks to the reliable financial services, microfinance customers can manage their money more steadily to make sure that the food is on their table every day. Most of the clients are women, who have been cornered in the house and the society in developing countries. As they began to generate revenue, their social status went up. 7

8 and Financial Success of Microfinance Thanks to its robust business model, microfinance has grown rapidly. A number of MFIs achieved a low nonperforming loan ratio and handsome profitability. There are several MFIs listed in the stock market. Growth of Global Microcredit (100 in 2000) Loan Write-off Ratio (World Average) Ordinary Profit Margin (World Average) % 18% 100 Microcredit loan balance in the world CAGR:37.9% GDP of developing or emerging countries CAGR:10.7% '00 '02 '04 '06 '08 '10 '12 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 2.4% 2.2% 1.8% 1.6% 1.6% 1.5% 1.3% 1.3% 16% 14% 2.7% 12% 2.5% 2.3% 2.3% 10% 1.8% 2.9% '00 '02 '04 '06 '08 '10 '12 8% 6% 4% 2% 0% 14% 14% 11% 16% 16% 15% 15% 15% 13% 11% 13% 15% 15% '00 '02 '04 '06 '08 '10 '12 12% Source: MIX Market; IMF "World Economic Outlook" 8

9 Problems in the sector and how Gojo solves them Problems: lack of supply, scarcity of professionals and high price Although microfinance has made remarkable success both financially and socially, there are still issues that we need to address. Adults with an account at a formal financial institution (2014) 2 billion people excluded from the service Background of the management of Asia s top MFIs No. of professionals scarce in the field Interest rate comparison (conceptual) Still expensive for some people to afford Local Bank MFI NGO Other Financial 31.3% 29.7% 7.8% 7.8% Informal Lender in Villages Microcredit Microfinance " Revolution 30% 200%+ 0-19% No Data Available Accounting International Organization Others 6.3% 4.7% 12.5% Developed Countries ±10% No MFI has achieved due to high cost of capital and operating expense Source World Bank, Global Financial Development Report 2014; Corporate website of the 3 top MFIs in Indonesia, Vietnam, Laos, Mongolia, Sri Lanka, Cambodia, Bangladesh, Nepal, Pakistan, Philippines and India. 9

10 We founded Gojo to solve these problems We believe that combination of global quality MFI and innovation enables us to solve the problems and provide financial services for everyone in the world. Gojo s theory of change: (1) make the global MFI group, (2) develop new services and generate new revenue, and (3) make financial services affordable to everyone 1. Global Operation Build or acquire MFIs and has its subsidiaries in all continents focusing on Asia by Management Support Provide management support for the subsidiary MFIs and let them be quality organizations 3. Service Development By leveraging its multinational coverage, we create new services and generate additional revenue Best Practice 10

11 Key Events and the Number of Clients (in 000s) Thanks to the investment principle, we have faced no issues over the last 3 years. Now we broke even with operations in 3 countries and 350 employees serving more than 44,000 clients. July 2014 February 2015 September 2015 Established Established an MFI Founded an MFI in August 2014 Took majority stake in a Cambodian MFI in Sri Lanka Myanmar with local partners Sep '14 Dec '14 Mar '15 Jun '15 Sep '15 Dec '15 Mar '16 Jun '16 Sep '16 Dec '16 Mar '17 Jun '17 Sep '17* *Projection 11

12 Gojo s MFIs are outperforming competitors We have achieved a remarkable success so far while balancing profitability and growth, our MFIs care about staff satisfaction which becomes the foundation of the client satisfaction. Figures as of Apr 2017 Market Average Gojo s MFIs (total) Total asset n/a $18.3 million Quarterly profit Number of clients growth (p.a.) Loan growth (p.a.) n/a ( world average: 2.0%) 12.8% (Middle-sized MFIs ) 5.8% (Middle-sized MFIs ) $0.2 million (Annualized ROA: 4.6%) 82.7% 57.7% 30 days overdue loan % Around 3.0% 1.0% Annual staff turnover rate Around 30% 13.6% Source MIX Market (the overdue and the staff turnover are rough estimate); defined MFIs with total assets lower than $50 million as middle-size MFIs 12

13 Roadmap of the Service Development We develop services one by one in light of (1) difficulty level of the development and (2) commercial rationale to launch the services. Challenging International Money Transfer Marketing Intelligence Data Service Loan Assessment Automation P2P (secondary market) Easy P2P (primary market)

14 Long term vision of the company In the end, we will be the Private Sector World Bank In the end, Gojo as a global MF group will provide the affordable financial services for everyone in the world. At that time, we will fairly define ourselves the Private Sector World Bank. Other MFIs Gojo Operation Area One or a few countries Founded as a local player and not good at overseas expansion Anywhere in the world Born Global, aiming to expand its business all over the world Revenue Source Interest only Multiple revenue sources Developing services (marketing support, data business, money transfer, etc.) Full-fledged after Prices of Services Remains high Minimum 20% yield in countries where the government bond yield is 10% Same as developed nations Can lower interest rates thanks to diversified revenue sources 14