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Presentation to the Portfolio Committee on Agriculture and Land Affairs 27 March 2007

Presentation to the Portfolio Committee on Agriculture and Land Affairs 27 March 2007. 2006/07 F/Y Performance Review. Provincial spread of the portfolio Portfolio mix: Mortgage vs Equity Sectoral mix: Agriculture vs Eco-Tourism New projects approved

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Presentation to the Portfolio Committee on Agriculture and Land Affairs 27 March 2007

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  1. Presentation to the Portfolio Committee on Agriculture and Land Affairs27 March 2007

  2. 2006/07 F/Y Performance Review • Provincial spread of the portfolio • Portfolio mix: Mortgage vs Equity • Sectoral mix: Agriculture vs Eco-Tourism • New projects approved • Rate Conversion: JIBAR to Prime-linked • Banks and other RFI’s participation • LREF BEE Scorecard • RFI Margin Cap

  3. 2007/08 Business plan • Grow loan book by R40m • Grow projects numbers by 10 • Emphasis in Free State, Limpopo, Northern Cape, Mpumalanga and Northwest • Improve portfolio mix • Facilitate beneficiaries training and capacity building • Financial Review

  4. Strategic initiatives • Khula/Mafisa project • Khula/TSB/ABSA project • Khula/dti Eco-Tourism potential Funding Challenges • Disbursements • Loan size per project • Dependence on LRAD • Capacity building

  5. New Projects Approved

  6. RATE CONVERSION: JIBAR TO PRIME-LINKED • All existing projects converted to prime-linked rates • New projects approved on prime-linked rates • Less Cumbersome admin process • 3% margin Cap on Retail Financial intermediaries to projects

  7. LREF BEE SCORECARD

  8. RFI MARGIN CAP Calculated @ Prime = 12.5%

  9. FINANCIAL REVIEW

  10. KHULA/MAFISA PARTNERSHIP • Khula/Mafisa Agreement • Production inputs • Target: BEE farmers • 100k – 300k per PDI • Up to R100k: Fund 90%: Bank(10%) • R100k-R200k: Fund 80%: Bank(20%) • R200k-R300k: Fund 70%: Bank(30%) • Interest rate to end-user @ Prime(Max) • 1% Indemnity Fee to RFI

  11. Qualifying Criteria for MAFISA • Off-take agreement for farmers produce • Insurance for all crops • Interest rate to farmers not more than Prime • Assistance package to includeMechanisation for: • Soil preparation • Planting • Weed cultivation • Chemical application • Spraying • Harvesting • Project management and farmer mentorship.

  12. KHULA/TSB/ABSA • Initiative to create a fund • Size of the fund R50m • Objective: settle at least 50 emerging farmers • Enterprise: sugarcane • Province: Mpumalanga(Malelane)

  13. KHULA/DTI • Khula in negotiations with the dti for funds to continue funding potential Eco-Tourism projects • Khula is in the process of structuring a proposal to the dti

  14. Challenges • Disbursement bottlenecks • Loan size per project • Dependence on LRAD • Capacity building • The bulk of the applicants are still coming from the Western Cape and KZN

  15. Thank You

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