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Inclusion through Business Correspondents Saurabh Tripathi, Partner & Director, BCG

Inclusion through Business Correspondents Saurabh Tripathi, Partner & Director, BCG. 17 th March 2010. India has third largest branch network in the World. # of branches/offices. United States. China. India. Japan. Italy. Spain. Germany. France. United Kingdom. Indon-esia. Canada.

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Inclusion through Business Correspondents Saurabh Tripathi, Partner & Director, BCG

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  1. Inclusion through Business Correspondents Saurabh Tripathi, Partner & Director, BCG 17th March 2010

  2. India has third largest branch network in the World • # of branches/offices • United States • China • India • Japan • Italy • Spain • Germany • France • United Kingdom • Indon-esia • Canada • Belgium • Thailand • Switzer-land • Philipp-ines • Malaysia Source: BCG analysis

  3. Traditional branches can not fill the gap in banking reach • # of branches/offices per million inhabitants • Spain • Italy • Switzer-land • France • Belgium • Germany • Japan • United Kingdom • United States • Canada • Thailand • Malaysia • India • China • Indon-esia • Philipp-ines High Penetration Moderate Penetration Low Penetration Source: BCG analysis

  4. The journey of telecom inclusion in IndiaTele density over time • Overall teledensity (%)1 • Mar-95 • Mar-96 • Mar-97 • Mar-98 • Mar-99 • Mar-00 • Mar-01 • Mar-02 • Mar-03 • Mar-04 • Mar-05 • Mar-06 • Mar-07 • Mar-08 • Mar-09 • Dec-09 Rural 9% 13% 18% Urban 60% 85% 101% 1. Includes wireless and wireline Source: Press run, TRAI, IndiaInfoline, Indiastat

  5. 542.81 The journey of telecom inclusion in IndiaPrice cuts unlocked latent market Timeline of significant events • US$/min Telecom tariff order Entry of incumbents BSNL & MTNL LifetimePrepaid 4th mobile operator entry • 391.80 CDMA service launch Micro Prepaid National Telecom Policy’ 99 Migration to revenue sharing Introduction of CPP Start of operations in all circles • 233.62 • 0.15 Lowering of ADC • 166.05 • 0.09 Start of operations in 4 metros • 90.14 • 52.22 • 0.03 • 33.69 • Mar-95 • Mar-96 • Mar-97 • Mar-98 • Mar-99 • Mar-00 • Mar-01 • Mar-02 • Mar-03 • Mar-04 • Mar-05 • Mar-06 • Mar-07 • Mar-08 • Mar-09 • Mar-10e • Revenue/min(US$/min) • Mobile subscriber base (Mn) Source: Citigroup Investment Research and Merill Lynch wireless matrix,TRAI

  6. Network coverage in India has expanded rapidly in last two years reducing potential to differentiate for a new entrant 2006: coverage largely in urban India 2008: Very few areas left uncovered Note: GSM coverage only Source: GSM World

  7. About USD 40 billion invested by the telecom industry • USD Mn • 1995-1998 • 1999-2002 • 2003-2007 • 2008-2010(e) Note: Deflated subscriber add-on's by 10% from 1994-2006 and then by 20% till 2010. Capex assumed to decline from $150 - $75 per subscriber from 1995-2010 Source: Bcg analysis

  8. Technology partners for financial inclusion Equity1 (Rs Cr) Revenue (Rs Cr) Profit/(Loss) (Rs Cr) Company 15 42 84 75 1.77 na na 50.74 (12.29) na na (16.75) Loss making, small and have no investment appetite 1. Paid up Capital + Reserves and Surplus Source: MCA, Company ARs

  9. Foundations for success “Seizing the opportunity” • Collaboration • Innovation • Experimentation Understanding the needs and limitations of all participating companies Deconstructing and reconstructing the value chain to realise aspirational goals Systematic experimentation; not condemning failure Sustainability Persistence and tenacity

  10. BC need to be value added partners • KYC • AML • Funds management BC Bank Payment Network Mobile phone Internet Back end integration Physical Outlets • Customer relationship • Product design • Pricing

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