ACCION TexasACCION Texaswww.acciontexas.orgwww.acciontexas.org

Lending. Supporting. Inspiring.

Janie BarreraPresident & CEO

EntrepreneurshipEntrepreneurship

“Social entrepreneurs are not content just to give a fish or teach how to fish. They will not rest until they have revolutionized the fishing industry.”

(Bill Drayton, CEO, chair and founder of Ashoka

ACCION TexasMission

The mission of ACCION Texas is to provide credit to small businesses that do not have access to loans from commercial sources. Through its loans and services, ACCION Texas helps microentrepreneurs strengthen their businesses, stabilize and increase their incomes, create additional employment and contribute to the economic revitalization of their communities.

Business Model

• Grants for operations

• Grants for loan pool

• Investments for loan pool

Our beginning

• $50,000 grant for operations

• $150,000 in loans for loan pool

• 3 full time employees

ACCION TexasACCION Texas

• ACCION Texas has (*):

–  1,773 active clients

–  $70,486,000 disbursed (since ’94)

–  9,067 loans (since ‘94)

– $19,348,947 active portfolio

– $10,913 average loan Balance

– 43 full-time employees

(*) As of June 2008

Petra RosalesOwner, Porcelain Dolls By Petra and Jorge

San Antonio, March 1994

McAllen, March 1998

Houston, September 1998

Dallas/Fort Worth, January 1999

Brownsville, May 1999

Austin, May 1999

El Paso, August 1999

Corpus Christi, August 2004

Laredo, September 2005

Arlington, December 2007

ACCION TexasACCION TexasOfficesOffices

Results - the “Real MeasureResults - the “Real Measure” ”

• Largest micro loan portfolio in US – almost $20 million

• Doubled portfolio in 3 years - great performance

– Delinquencies - < 5%

– Charge Offs - < 5%

– Restructures - < 2%

• Won 2007 Wachovia NEXT Award as best CDFI of over 600 with $50 million or less in assets. Winner based on community impact, bold and compelling mission, potential for explosive growth

Results - ContinuedResults - Continued

• Citi $30 Million Investment

- - First in the U.S.

• AAA CARS Rating

- - 2nd year in a row

• Investment Grade Portfolio

- - Potential to Rate Other Microloan Funds

05

101520253035

$ M

illio

ns2007-08 Portfolio ACCION Network

ACCION Texas All Others

0.0%

2.5%

5.0%

7.5%

10.0%

12.5%

15.0%

2007-08 Annualized Rate of Default ACCION Network

ACCION Texas All Others

0%2%4%6%8%

10%12%14%

2007-08 Delinquency ACCION Network

ACCION Texas All Others

0%

2%

4%

6%

8%2007-08 Restructures ACCION Network

ACCION Texas All Others

ACCION Texas Loan & Micro-Loan Management Service Areas

Albuquerque

Chicago

Cleveland

ACCION Texas Loan Program Service Area

Micro-Loan Management Service Sites

Denver

Pierre

Columbus

($300,000)

($150,000)

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The Road to Self Sufficiency

Revenues Expenses Net From Operations

Operational Advantages

• Disburse over $1 million month/ loan 2 every hour

• Collateral support system wide – any CSR can support any loan officer – demand based.

• Cross department support – “Collections a Team Sport at ACCION Texas”

• Streamlined loan process –

MMSNationwide Microloan Management Services

• Proprietary total loan management system developed by ACCION Texas – 2006

• Single paperless system from application to payoff – auto process online apps

• Reduce loan cycle time by 50%

• High Tech – High Touch

• Clients on board and commitments

How It WorksApplicants

1st Filter

Pre-Approved by TiersDenied

Risk AssessmentBad Risk

Loan Officer Review

Underwriting

Processing

Documents Requested

Close Loan

MMS

• With implementation of ACCION Texas Microloan Management System, CDFI micro lenders and other lenders (Credit Union) have the potential:

– double their loan production

– reduce overhead staff

– or a combination of the two.

– Savings of time and multiple $ millions

Business Environment: Business Environment:

• Falling Home Prices

• Credit Crisis

• Energy + Food + Healthcare

• Unemployment: Rising

• Stocks: Falling

• Yield Premiums: Increasing

ACCION Texas ResponseACCION Texas Response

• Maintain rates

• New sources of revenue

• Prudent increase in provisions

• Focus on portfolio performance

• Continue expanding

Conclusion

• Social and Economic Mission

• From modest beginnings to biggest and best

• Our constraint is not eligible clients. It is Capital

• Proven business practices in a non-profit world

• Be lowest cost provider of microloans nationally

• Pursue strategic partners