South African Micro-finance Apex Fund sa maf ANNUAL REPORT 2011/12

1. South African Micro-finance Apex FundsamafANNUAL REPORT2011/12

2. Presentation Outline • Mandate, Vision, Mission, Values & Objectives • Operating Model • 2011/2012 Performance Highlights • samaf National Footprint • 2011/12 Financial Performance • Auditor General Report • Way forward

3. Mandate • samaf’s mandate is to create work opportunities and sustainable livelihoods through the facilitation and provision of affordable access to finance to micro, small and survivalist businesses for the purpose of growing their income and asset bases. It is also required to act as a catalyst in the development of a vibrant micro-finance industry in South Africa. The primary purpose is: • To facilitate the provision of affordable access to finance by micro and survivalist businesses; • To extend financial and non-financial services to reach deeper and broader into the rural areas, informal settlement and peri-urban settlement of South Africa; • To contribute towards the reduction of poverty and unemployment; • To build a strong, effective and efficient wholesale (Apex) Fund; • To contribute to better quality of life; and • To contribute towards a sustainable and vibrant micro financial industry in South Africa.

4. Vision & Mission Mission Vision • To provide developmental finance and non-financial services to financial intermediaries through: • Mobilization of financial intermediaries • Wholesaling of funds • Development of institutional capacity • Lobbying and advocacy towards policy development • Development of valuable partnerships (between government , businesses and communities) • “To be a leader in developmental micro finance” (in South Africa)

5. Values & Objectives Objectives • 1. Contribution to poverty alleviation goals through; • Funding Intermediaries( Enterprise loans and poverty alleviation loans) • Capacitating Financial Intermediaries • Regulation and Prudential Standards • 2. Exceed our stake holder expectation through; • Improving outreach through expanded satellite network / offices • Improving internal turnaround standards • 3. Improvement of processes to achieve service delivery excellence through; • Improving financial reporting and management • Strengthening risk management • Increased compliance of legal and other regulations • 4. Leverage performance through capacity and people through; • Organisational Development • Balance Scorecard & Performance Management • Organisational Design & Change Management • 5. Building sustainable Apex Fund • Improved quality of lending portfolio and internal control environment

6. samaf Operating Model PR & COMS External Internal External Education Selection Research DIRECTOR GENERAL Support Primary / Core OPERATIONS REG FI’s CONSUMERS Strategic Oversight IT FIN SC HR CB Internal Audit EDD MARKET SAMAF

7. 2011/12 Performance Highlights • Disbursements of R58.3m were made to FI’s in respect of loans and grants. • 14 Micro Finance Institutions, 23 Financial Services Cooperatives and 24 stokvels were supported. • The total number of borrowers increased by 53% from 40 726 to 62 459. • 68% of loans by the FI to end users were in rural communities and 93% were micro-enterprise loans. • The number of end user savings increased by 15 % from 31 129to35 719 • Installment repayments by FIs average 95% • 272 individuals from 68 institutions nationally participated in capacity building workshops. • samaf received an unqualified audit report

8. Approved Funding (R’m) • An increase of 21% as compared to the previous financial year was achieved

9. Total Disbursements (R’m) • Capacity building decreased by 32% as compared to the previous financial year • On lending funds increased by 104% as compared to the previous financial year

10. On- lending per Province (R)

11. Capacity Building per province (R)

12. samaf NATIONAL FOOTPRINT • M= Micro Finance Institutions • F= Financial Services Co-operatives M=4 F=4 M=3 F=5 M=0 F=4 M=2 F=1 M=2 F=6 M=0 F=3 M=0 F=5 M=3 F=3 M=1 F=6

13. 2010/11 Financial Performance Statement of Comprehensive Income

14. 2011/12 Financial Performance Operating expenditure

15. Administration expenses (R’m)

16. Impairments as a % of Financing

17. Assets for the last 5 years (R’m)

18. Auditor General Report • OPINION • An unqualified opinion was expressed, however issues were raised as part of emphasis of matter. • EMPHASIS OF MATTER • Going concern • The Economic Development Department is re-organisingits small lending business institutions by merging samaf, Khula and small business activities of the Industrial Development Corporation (IDC). • Material write-off and Impairments • Material losses to the amount of R 3 693 745 were incurred as a result of the write off of loans provided to financial intermediaries. • In addition, material impairments to the amount R 2 899 287 were incurred on loans provided to Financial Intermediaries.

19. Auditor General Report (cont…) • REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS • Usefulness of information • Predetermined objectives • The reported performance information was deficient in respect of the following criterion: • Measurability: Indicators are not well defined. • Reliability of information • The reported performance information was deficient in respect of the following criterion: • Accuracy: the amounts , numbers and other data relating to actual performance have not been recorded and reported appropriately. • Completeness: All actual results and events that should have been recorded have not been included in the reported performance information. 19

20. Way Forward • As of the 1st of April 2012, Khula was merged with the South African Micro Finance Apex fund (samaf) as well as the business operations of the Industrial Development Corporation’s (IDC) small business funding portfolio. • The new entity is called the Small Enterprise Finance Agency (sefa).

21. THANK YOU