Khula Enterprise Finance LtdKhula’s Quarterly Performance for the period ending

30th June 2010 Parliamentary Portfolio Committee

Venue: Parliament: Cape Town

24th August 2010

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Presentation Outline

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Introduction

Performance of Retail Financial Intermediaries

Performance of Funds

Performance of Indemnities & Properties

Mentorship Programme

Pipeline Projects

Khula’s relationship with IBA

IBA Membership by Province

Conclusion

Introduction

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The period under review has experienced significant changes. Some of the important changes are:

Appointment of the new Board Reporting to the new ministry Economic Development Department

These changes have had an impact on the performance and confidence of staff because of uncertainty of the future.

The arrival of the new Board has had a bearing on the business of since Khula management spent time familiarizing the new Board with Khula operations and getting Board to give a directive on the strategy instead of pushing deals and business.

The fact that economy is recovering from the global crunch which also had an influence on SMEs performance in the country did not make the situation better.

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BUSINESS LOANS

Committed

Opening

Balance

Approval

s YTD

Disbursed

2009/10 Balance

01 April

2010

30 June

2010 30 June 2010 30 June 2010

Marang Financial Services R10,000,000 R- R-5,000,000 R5,000,000

Vengrow (Bluedot) R20,000,000 R- R- R20,000,000

Blue financial Services R50,000,000 R - R50,000,000

New Business Finance (Pty) Ltd R15,000,000 R- R-4,000,000 R11,000,000

Retmil Financial Services R- R- R- R -

Small enterprise finance R- R- R- R-

SupplyFin (Pty)Ltd R10,000,000 R- R10,000,000

Mettle administration Services (Pty)

Ltd R30,000,000 R- R- R30,000,000

Entrepreneur Growth fund R30,000,000 R- R- R30,000,000

Cape Capital Investment & Finance R20,000,000 R- R-5,000,000 R15,000,000

R185,000,00

0 R- R-14,000,000

R171,000,00

0

Performance of Retail Financial Intermediaries

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Disbursements of Equity Funds as at 30 June 2010

Anglo-khula R -

Business Partners-Khula Start up Fund R 8,832,000 Khula-Enablis Loan Fund R - Khula-Enablis SME Acceleration Fund R 500,000 Shoprite Checkers Franchise R - Khula SME Fund trust R -

Izibulo SME Fund R - Identity Development Fund R 2,888,935

Small business Growth trust fund(Fabcos Fund) R 3,143,000 Akwandze R - ECDPW (BFPA-managed fund) Emerging contractors R - LEF (Limpopo & Mpumalanga) R -   R 15,363,935

Performance of Funds

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Performance of Indemnities & Properties

Flow of business: April – June 2010

product Approval disbursements

Credit indemnities R8,969,055

R3,914,183

Properties R28 000,000

Total R36,969,055 R3,914,183

Approval of R28m was earmarked and targeted for

investment in the Gugulethu Shopping Centre in the

Western Cape Township

Mentorship Programme

Pre-Loan 5 business loans were developed at a

cost of R26 050.

Post-Loan Cost of post-loan interventions

amounted to R63 790

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State owned Enterprise Procuremtn Programme - R100 million.

Utho Capital fund - R30 million – Utho seeks to create a niche construction Fund that will inves in SMEs.

Pipeline Projects

   

TERM

TRANSACTION SIZE

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Khula has a relationship with the institute of Business Advisors (IBA).

IBA also recruits mentors in deep rural areas – this has benefited Khula though there has been a shortage of mentors in these areas.

IBA’s main focus is accreditation and upgrading of business advisory skills.

Khula’s relationship with IBA

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IBA Membership By Region Number Percentage

Eastern Cape 76 16.1%

Free State 28 5.9%

Gauteng 181 38.4%

KZN 35 7.4%

Limpopo 26 5.5%

Mpumalanga 28 5.9%

N/Cape 13 2.8%

Northwest 28 5.9%

Western Cape 56 11.9%

TOTAL 471 100%

IBA Membership by Province

Conclusion

A number of reasons why the organisation has not performed well in the period under review. Some of these reasons are:Khula’s reliance on the intermediaries to get its products to the end user.

The maturity of some products that need to be reviewed.Getting rid of the cradle to grave” approach and establishing a proper Risk Management Unit

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THANK YOU

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