Business Plan

BACKGROUND
Started Service since January 2007

** Card-to-card Money transfer with Standard Charted Bank Nepal and Visa International
Using local Software provided by Inficare Since May 2009. Providing Money Transfer Service in association with City Exchange Company Qatar and Alukkas Exchange Company UAE Distribution network consists of Commercial Banks, Development Banks , Finance Companies, Co-operatives, and Retail Outlets.
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**As the market was not ready for such a technically advanced product and the system used (i.e. YCS Software) itself being non-user friendly along with high service charge of Visa International, Cardto-card Money Transfer service became financially non-feasible.

PRESENT SCENARIO
Highly competitive markets with established national and international brands like IME, Prabhu, Himal Remit, Western Union, Moneygram, Xpress Money etc. along with commercial banks remittance product and ever Increasing national money transfer companies. Modus operandi of all the money transfer companies are same. ** Competing by providing higher Forex rate. (up to 50 p per USD as premium) Aggressive and sometimes non-ethical marketing abroad. ** Tie-up with exchange company abroad and distribution through is hardly any difference as to service provided by different Money Transfer Companies.
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OBJECTIVE
To develop a financially feasible money transfer product by addressing the financial needs of a migrant worker.

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HYPOTHESIS
The Migrant worker needs the following financial services. I. Loans: Currently they are taking loans from individuals paying an annual interest up to 36%

II. Household Expenses: Over the counter cash payment money transfer service III. Savings: Bank account deposit money transfer service IV. Payment Services: Loan Re-payment, School fees of their Children, utility bills and other bill payments.

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PRODUCT DEVELOPMENT
I. Loans: Migrant workers take loan from individual with high interest rate i.e. 36% p.a. because of collateral issues with commercial banks. As Union Money itself is not in position to provide loans to the migrant workers, this loan product has to be provided in partnership with banks or financial institutions at the same time addressing the collateral issues.

Recommendation: Providing these loans under deprived sector lending either directly or through collaboration with rural financial or micro-financial institutions. II. House hold Expenses: Continue with the present set up of using Exchange Companies abroad for collection of funds and delivery networks in Nepal for delivery of funds. Recommendation: Over the Counter cash payment. Continued

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PRODUCT DEVELOPMENT
III. Savings: One of the major needs of the migrant worker is to save the earnings made while working abroad as the money sent for household expenses are already spent. So, they are sending part of their earnings to be deposited to their bank accounts through various money transfer companies and that money transfer company transfer the amount in respective bank accounts manually. This process is both time consuming and is of high security risk. Recommendation: Union Money can develop an automated process for account deposit money transfers. IV. Payment Services: This will be a value added service to migrant workers to fulfill their loan, utility bill, and other bill payment obligations. Recommendation: Over the Counter cash payment, account deposit product.
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MODUS OPERANDI
I. Loan Product: Once the loan product is developed, Union Money can force the migrant worker to use its services for loan repayment. However, since Union Money s reach abroad is limited, a more feasible set up for Union Money would be commission-sharing basis on loan repayment and the migrant worker can use any other money transfer service available to them abroad.

II. Over the Counter Cash Payment: Continue with the present set up and with development of loan product and Account deposits product, seek to increase the collections centers abroad and increase the delivery network in Nepal as per requirement.

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Continued

MODUS OPERANDI
III. Account Deposits: To make Account Deposits automated, a payment Gateway is required. Upon finalization of this product, as Union Money s presence abroad is minimal, this product can be sold to other Intenational and National money transfer companies thus increasing the volume and decreasing the forex exposure risk. IV. Payment Services: Union Money needs to develop a mechanism whereby the migrant workers themselves or Union Money are able to provide/get the bank account number of respective beneficiaries i.e. for loan repayment, school fees, utilities etc. Then Union Money can use its Account Deposit product for this service.

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The End Thank You