Case Study: Moolani Foundation - Final Project Submission

1a. Are the environmental conditions in Kenya, India and South Africa conductive to starting the foundation?
The aim of the foundation is provide to undergraduate business student wit the requiered resources to work abroad, and at the same time the foundation is open to find partnet agreements with
microfinance organizations in third world countries to help the lower economic class to start small business.
Kenya, India and South Africa sounds perfect and eligeble for the project due to their rates of poverty and high range of population belong to low economic class.

1b. Which of the countries would provide the best long-term opportunities for the Moolani Foundation?
GDP (mill $)

GDP real
growth
Rate
(%)

GDP per
capita
($/person)

Unemployme
nt
Rate
(%)

Economic Aid
Recipient ($
mill)

Population
(mill)

Labor Force
(mill)

External
Debt
($mill)

Life
Expectancy
(yrs of age)

Literacy
(%)

491,400.00
34,680.00
3,319,000.00

3.50
2.20
6.20

11,100.00
1,100.00
3,100.00

26
40
9

488
0
2,900

44.30
33.80
1,080.20

16.60
11.40
482.20

27,010
6,792
117,200

43.27
47.99
64.35

86.40
85.10
59.50

Country
South Africa
Kenya
India

According with the figures presented in the exhibits, India is the country who fits better the criteria that Moolani Foundation is requering for its project. Below we present a list with the main concepts to choose one
country or the other one.

Cost of
Living

Employment

Microfinance
Institutions

Literacy

Total

South Africa

Exchange
Rate

Kenya

GDP

Country
India

3
1
2

2
1
3

3
1
2

3
1
2

3
2
1

1
3
2

15
9
12

Following the score of the ranking India is the best fit for Moolani project base on:
- The cheapest country on terms on cost of living, so the project expenses will reduce compare other alternatives
- First country in number of microfinance institution, that will provide better knowledge of the project and better options to find a partner
- Low employment rate, show us good background for new projects and business

2. Prepair monthly statement of cash flows as well as the cash budget from Sept 1, 2007, to Aug 31, 2008, for
the internships in South Africa, India, and Kenya

Mar-08
Apr-08

$
$

800.00 $
800.00 $

500.00 $
500.00 $

3,800.00 $

1,600.00 $

1,000.00 $

May-08
Jun-08

$ 800.00
600.00 $ 800.00
600.00

Jul-08
Aug-08

TOTAL

1,200.00

###

$ 50.00

$9,200.00

1,600.00 $

1,000.00 $

Jul-08
Aug-08

TOTAL

1,200.00

###

$9,400.00

$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
### $ 366.63

25.00 $ 50.00
25.00
25.00
25.00
25.00 $ 50.00

2,115.00
98.33
98.33
98.33
4,148.33
148.33
98.33
898.33
2,798.33
1,998.33
98.33
98.33
12,696.63

Web
Maintenanc
e

$
$
$
$
$

$
$
$
$
$
$
$
$
$
$
$
$
$

$12,696.63

Web

40.00
40.00
40.00
40.00
40.00

Adv.
Material

Paper
Supplies

### $
$
$
$
$

Calls

Copy
Machine

Rent

$ 750.00

3,550.00

$150.00

###

$3,296.63

Misc
Cost

Food

Travel
Expenses

Sep-07
Oct-07
Nov-07
Dec-07
Jan-08 $

Fight
Ticket

SOUTH
AFRICA

$ 50.00
$ 50.00

2,115.00
98.33
98.33
98.33
3,948.33
148.33
98.33
898.33
2,798.33
1,998.33
98.33
98.33
12,496.63

TOTAL

4,000.00 $

$ 800.00
600.00 $ 800.00
600.00

$ 50.00

Web
Maintenanc
e

500.00 $
500.00 $

### $ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
### $480.00

$
$
$
$
$
$
$
$
$
$
$
$
$

$12,496.63

Web

800.00 $
800.00 $

Adv.
Material

$
$

May-08
Jun-08

Paper
Supplies

Mar-08
Apr-08

$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$300.00

Calls

4,000.00

Copy
Machine

Rent

Sep-07
Oct-07
Nov-07
Dec-07
Jan-08 $
Feb-08

$150.00

$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
### $ 366.63

$3,296.63

Misc
Cost

Food

Travel
Expenses

Fight
Ticket

KENYA

$ 50.00
$ 50.00

###

TOTAL

3,800.00

$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$300.00

Web
Maintenanc
e

### $ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
### $480.00

Web

Jan-08
Feb-08

Adv.
Material

Nov-07
Dec-07

Paper
Supplies

Oct-07

Calls

Sep-07

Copy
Machine

Rent

Misc
Cost

Food

Travel
Expenses

Fight
Ticket

INDIA

###
$
$
$
$

$
33.33 $
33.33 $
33.33 $
33.33 $

2,865.00
98.33
98.33
98.33
3,698.33

Feb-08
Mar-08
Apr-08

$
$

1,000.00 $
1,000.00 $

600.00 $
600.00 $

3,550.00 $

2,000.00 $

1,200.00 $

May-08
Jun-08

$ 900.00
750.00 $ 900.00
750.00

Jul-08
Aug-08

TOTAL

1,500.00

###

$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
### $480.00

$ 25.00 $ 50.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$300.00 $150.00

$10,800.00

$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
### $ 366.63

$3,296.63

$
$
$
$
$
$
$
$

148.33
98.33
998.33
3,348.33
2,448.33
98.33
98.33
14,096.63

$14,096.63

We prepair the statement based on 2 internship to be sent to the selected country. Canadian Dollar $
The most economical country is India, that together with other aspects indicated in Q1 make our choose for India more clear

3. To what extent should Moolani be concern about exchange rate fluctuations? If the value of the canadian
dollar were to decrease relative to the foreign currencies, how would cash flow be affected?
Exchange Rate Fluctuations can affect a lot the operations and successful of Moolani Foundation projects.
All the expenses of the interns in the inbond country must be done in the local currency and the fluctuation of the currency will affect the cash flow of the foundation.
South African Rand seems the most estable currency from jan-2003 to jan-2007, keeping the same exchange of 1 CAD = 8 SAR. Kenyan Shilling is the currency, out from three, with biggest
movement in the last years. In the case of Indian Rupees the movement from January 2003 to January 2007 represent an increase of 30% of the value comparing with CAD. The trend is always up
so we can not expect a reduce in the exchange rate for the next couples of years.
With this trendency where CAD is decreasing relative to foreign currencies we will need more cash to afford our operations for the next years. That means, the expenses of Moolani Foundation will
be higher with that exchange rate trend.
We would recommend two possible solutions to Moolani FOundation in order to minimize the problem of exchage rate fluctuations:
* Exchage from CAD to Indian Ruppes the amount of money they will need to cover the expenses during the internship in India (see Q2 excell chart). Maybe they will lost the oportunity to gain
some money for positive fluctuation of ruppee agains CAD, but Molaani business is other and this kind of risk is too high for some new ventures.
* Negotiate with a bank an exchange rate insurance, in order to avoid the fluctuation of the currencies. In that way we will know what is the exchange rate and we plan better our operations on
the inbond country.

4. In the second year, if four student in total were to take the internship, how would the finance requierements
change, assuming administrative costs remained constant?
We calculate the budget assuming that four student participate in the program in India, that it is the selected country.
With 2 students the cost was $12,496.63 while with 4 students the expenses go up to $19,729.96, total increase of

7,600.00

Mar-09
Apr-09
May-09
Jun-09

$
$

1,600.00 $
1,600.00 $

1,000.00 $
1,000.00 $

1,200.00
1,200.00

7,600.00 $

3,200.00 $

2,000.00 $

2,400.00

###
###

Jul-09
Aug-09

TOTAL

$18,400.00

### $

$ 50.00

$ 50.00
$ 50.00

$150.00 $

$1,329.96

$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$
33.33
$ 399.96

TOTAL

Web
Maintenance

Jan-09
Feb-09

$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$300.00

Web

Nov-08
Dec-08

$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$480.00

Adv. Material

Oct-08

Paper
Supplies

Sep-08

Calls

Copy Machine

Rent

Misc
Cost

Food

Travel
Expenses

Fight
Ticket

INDIA

57%

$
$
$
$
$
$
$
$
$
$
$
$
$

148.33
98.33
98.33
98.33
7,748.33
148.33
98.33
1,698.33
5,498.33
3,898.33
98.33
98.33
19,729.96

$19,729.96

5. Make a formal proposal to the bank. When and how much money does Moolani need? Provide an explanation
why that time and why that much
Moolani Foundation should request a credit up to $32.300 that is the amount to cover the expenses during the first two years. They should request the credit in September 2007. Before the
second year they should invest the money from the credit in a short-term fund in order to get extra capital and arrive to the second year with more experience and better cash flow.
In order to convince the bank to the acceptance of the credit I would show the numbers above to the bank, where we indicate our accurate budgets and we should explain to them what is the
project we want to launch in India and why we choose India. We would sell the proyect as a social responsible project where they can be partners and get a global recognition for their social
behaviour.

1a. Are the environmental conditions in Kenya, India and South Africa c

The aim of the foundation is provide to undergraduate business student wit the requiered resources to
agreements with microfinance organizations in third world countries to help the lower economic class
Kenya, India and South Africa sounds perfect and eligeble for the project due to their rates of poverty

1b. Which of the countries would provide the best long-term opportuni

GDP per capita

($/person)

Unemployment
Rate
(%)

Economic Aid
Recipient ($
mill)

Population
(mill)

India

GDP real growth

Rate
(%)

Kenya

GDP (mill $)

Country
South Africa

491,400.00
34,680.00
###

3.50
2.20
6.20

11,100.00
1,100.00
3,100.00

26
40
9

488
0
2,900

44.30
33.80
1,080.20

According with the figures presented in the exhibits, India is the country who fits better the criteria that Moolani
choose one country or the other one.

Cost of
Living

Employment

Microfinance
Institutions

Literacy

South Africa

Exchange
Rate

Kenya

GDP

Country
India

3
1
2

2
1
3

3
1
2

3
1
2

3
2
1

1
3
2

Following the score of the ranking India is the best fit for Moolani project base on:
- The cheapest country on terms on cost of living, so the project expenses will reduce compare other alternative
- First country in number of microfinance institution, that will provide better knowledge of the project and better
- Low employment rate, show us good background for new projects and business

South Africa conductive to starting the foundation?

quiered resources to work abroad, and at the same time the foundation is open to find partnet
wer economic class to start small business.
heir rates of poverty and high range of population belong to low economic class.

erm opportunities for the Moolani Foundation?

Labor Force
(mill)

External Debt
($mill)

Life Expectancy
(yrs of age)

Literacy
(%)

16.60
11.40
482.20

27,010
6,792
117,200

43.27
47.99
64.35

86.40
85.10
59.50

e criteria that Moolani Foundation is requering for its project. Below we present a list with the main concepts to

Total

15
9
12

pare other alternatives

the project and better options to find a partner

d partnet

main concepts to

2. Prepair monthly statement of cash flows as well as the cash budget

31, 2008, for the internships in South Africa, India, and Kenya

Rent

Misc
Cost

Food

Travel
Expense
s

Fight
Ticket

INDIA
Sep-07
Oct-07
Nov-07
Dec-07
Jan-08

###

Feb-08
Mar-08

$ 800.00
$ 800.00 $ 500.00 $ 600.00 $ 800.00
$ 800.00 $ 500.00 $ 600.00

Apr-08
May-08
Jun-08
Jul-08
Aug-08

TOTAL

###

###

###

###

###

$9,200.00

Rent

Misc
Cost

Food

TOTAL

Travel
Expenses

Sep-07
Oct-07
Nov-07
Dec-07
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Aug-08

Fight
Ticket

KENYA

###

$ 800.00
$ 800.00 $ 500.00 $ 600.00 $ 800.00
$ 800.00 $ 500.00 $ 600.00

###

###

###

$9,400.00

###

###

Rent

Misc
Cost

Food

$ 750.00

###

$ 900.00
### $ 600.00 $ 750.00 $ 900.00
### $ 600.00 $ 750.00

May-08
Jun-08
Jul-08
Aug-08

TOTAL

Travel
Expenses

Sep-07
Oct-07
Nov-07
Dec-07
Jan-08
Feb-08
Mar-08
Apr-08

Fight
Ticket

SOUTH
AFRICA

###

###

###

###

###

$10,800.00

We prepair the statement based on 2 internship to be sent to the selected country

The most economical country is India, that together with other aspects indicated in Q1 make our choo

ll as the cash budget from Sept 1, 2007, to Aug

a, and Kenya

$ 50.00

$ 50.00
$ 50.00

$150.00

Web
Maintena
nce

Adv.
Material

$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$300.00

Web

Paper
Supplies

Calls

Copy
Machine

### $ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
### $480.00

###
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
### $366.63

$3,296.63

$ 50.00

$ 50.00
$ 50.00

$150.00

$3,296.63

Web
Maintena
nce

Adv.
Material

$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$300.00

Web

Paper
Supplies

Calls

Copy
Machine

### $ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
### $480.00

###
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
### $366.63

$ 50.00

$ 50.00
$ 50.00

$150.00

$3,296.63

ted country
indicated in Q1 make our choose for India more clear

Web
Maintena
nce

Adv.
Material

$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$300.00

Web

Paper
Supplies

Calls

Copy
Machine

### $ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
### $480.00

###
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
### $366.63

TOTAL

$
$
$
$
$
$
$
$
$
$
$
$
$

2,115.00
98.33
98.33
98.33
3,948.33
148.33
98.33
898.33
2,798.33
1,998.33
98.33
98.33
12,496.63

$12,496.63

TOTAL

$
$
$
$
$
$
$
$
$
$
$
$
$

2,115.00
98.33
98.33
98.33
4,148.33
148.33
98.33
898.33
2,798.33
1,998.33
98.33
98.33
12,696.63

###

$
$
$
$
$
$
$
$
$
$
$
$
$

2,865.00
98.33
98.33
98.33
3,698.33
148.33
98.33
998.33
3,348.33
2,448.33
98.33
98.33
14,096.63

###

3. To what extent should Moolani be concern about exchange rate fluct

the canadian dollar were to decrease relative to the foreign currencies,
affected?

Exchange Rate Fluctuations can affect a lot the operations and successful of Moolani Foundation proje
All the expenses of the interns in the inbond country must be done in the local currency and the fluctu
cash flow of the foundation.
South African Rand seems the most estable currency from jan-2003 to jan-2007, keeping the same ex
Shilling is the currency, out from three, with biggest movement in the last years. In the case of Indian
2003 to January 2007 represent an increase of 30% of the value comparing with CAD. The trend is alw
reduce in the exchange rate for the next couples of years.
With this trendency where CAD is decreasing relative to foreign currencies we will need more cash to a
years. That means, the expenses of Moolani Foundation will be higher with that exchange rate trend.
We would recommend two possible solutions to Moolani FOundation in order to minimize the problem
* Exchage from CAD to Indian Ruppes the amount of money they will need to cover the expenses duri
excell chart). Maybe they will lost the oportunity to gain some money for positive fluctuation of ruppee
is other and this kind of risk is too high for some new ventures.
* Negotiate with a bank an exchange rate insurance, in order to avoid the fluctuation of the currencie
the exchange rate and we plan better our operations on the inbond country.

ut exchange rate fluctuations? If the value of

he foreign currencies, how would cash flow be

ful of Moolani Foundation projects.

he local currency and the fluctuation of the currency will affect the

an-2007, keeping the same exchange of 1 CAD = 8 SAR. Kenyan

ast years. In the case of Indian Rupees the movement from January
ring with CAD. The trend is always up so we can not expect a

ies we will need more cash to afford our operations for the next
with that exchange rate trend.
order to minimize the problem of exchage rate fluctuations:
eed to cover the expenses during the internship in India (see Q2
or positive fluctuation of ruppee agains CAD, but Molaani business

the fluctuation of the currencies. In that way we will know what is

ntry.

4. In the second year, if four student in total were to take the internshi
requierements change, assuming administrative costs remained consta

Copy
Machine

Rent

Misc
Cost

Food

Travel
Expense
s

Fight
Ticket

INDIA
Sep-08
Oct-08
Nov-08
Dec-08
Jan-09

###

Feb-09
Mar-09
Apr-09
May-09
Jun-09

###
###

###
###

###
###

###

###

###

###
###

Jul-09
Aug-09

TOTAL

###

$18,400.00

### $

the internship, how would the finance

mained constant?

$
$

50.00
50.00

$ 150.00 $

$1,329.96

$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 33.33
$ 399.96

TOTAL

50.00

Web
Maintena
nce

Web

Paper
Supplies

$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 25.00
$ 300.00

Adv.
Material

Calls

$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 40.00
$ 480.00

$
$
$
$
$
$
$
$
$
$
$
$
$

148.33
98.33
98.33
98.33
7,748.33
148.33
98.33
1,698.33
5,498.33
3,898.33
98.33
98.33
19,729.96

###

5. Make a formal proposal to the bank. When and how much money doe
Provide an explanation why that time and why that much

how much money does Moolani need?

at much