A SUMMARY OF KHULA OUTPUTSTO THE PORTFOLIO COMMITTEE
25 March 2003
High-level Objectives
To make an impact on the transformation of the South African economic landscape by contributing towards the DTI strategic objectives
Facilitate mobilization and directing of resources (public & private sector funding) towards SME development.
Core Strategic Objectives
To achieve a return on investment that ensures retention of the capital base. (Finance)
To offer sustainable credit and capital through a network of efficient distribution intermediaries. (Customers)
Core Strategic ObjectivesScaling and growing the operations, through
managed risk, to achieve impact and outreach. (Finance)
To acquire, develop and retain the human talent to meet the short, medium and long-term needs of Khula. (People)
To develop and implement an integrated business marketing strategy. (Process)
Growth StrategiesMobilise banks for mass or scale delivery.
– Training workshops with bankers and marketing
– Mainstream and roll-out a credible mentorship
To stimulate the provision of venture [start-up] and small scale equity finance.
To research and package innovative products that can mobilise and attract the financial industry participation in Khula mandate.
Build on nation wide communication campaign
Growth Strategies Segment the market and design a suitable product
mix and structure accordingly.– Emerging and matured markets
To support the distribution network in line with market needs.– capacitate and develop to serve the all market
segments [from under-banked to bankable enterprises]– To improve outreach and efficiency of emerging
market network Improve market access through business linkage
initiatives
Where are we ? 1996 – 2003 & year ending 2003 [28/02]
Corporate
Objectives
Cumulative
1996 - 2003
Target
2003
Actual
2003
Rating
2003
Approved
Business Loans
R363,6m R70,0m R77,8m
Committed Guarantees
R348,2m R258,0m R145,0m
Approved LRCF Loans
R56,9m R20,0m R20,8m
Approved
Equity deals
R12,9m R14,0m R9,6m
Where are we ? 1996 – 2003 & year ending 2003 [28/02]
Corporate
Objectives
Cumulative
1996 - 2003
Target
2003
Actual
2003
Rating
2003
Approved -RFI
Cap, Seed loans; Capacity Build
R173,7m R22,9m R27,7m
Approved -MCO
Seed loans on-lend & ops; Capacity Build
R28,3m R16,1m R10,1m
Thuso Mentorship: Business Plans After-care visits
R67,9m994
R24,0m210
R23,0m341
Where are we ? 1996 – 2003 & year ending 2003 [28/02]
Impact Stats &
Property Income
Cumulative
1996 - 2003
Targets
2003
Actual
2003
Rating
2003
Total Gross
Jobs Created:
All Programmes
1 064005 124 498 126 764
No of Guarantees
Committed2544 1 290 496
Thuso B Plans 306 120 97
Property Income R8,3m R7,6m R8,3m
522558
759
850800
0
100
200
300
400
500
600
700
800
900
3/98 3/99 3/2000 3/2001 3/2002
Credit Guarantees“Numbers”
Credit GuaranteesCredit Guarantees“Rands”“Rands”
R 64,148
R 102,418
R 141,329
R 170,086R 179,965
R 0
R 20,000
R 40,000
R 60,000
R 80,000
R 100,000
R 120,000
R 140,000
R 160,000
R 180,000
3/98 3/99 3/2000 3/2001 3/2002
R'000
Khula Equity Funds
Rand value of deal approved = R 18mNumber of deal approved = 11 Jobs created = 492 Investee Companies:
83% Male 17% Female
17% Rural 83% Urban
100% PDI
Land Reform Empowerment Facility
Funds loaned out to Date = R57 mNumber of projects = 16Number of PDI (Shareholders) = 794
– Male 360 Female 434
Job created = 1,261– Males 592 Females 669
Retail Financial Intermediaries
Funds loaned out to Date = R338 mNumber of RFI’s = 16Number of RFI Clients = 165 880
– Male 30% Female 70%– Black 96% White 4%– Urban 70% Rural 30%
Job creation estimate = 948 466
Khula-starts
Funds loaned out to Dec 2002 = R17 mNumber of Khula-starts = 17Number of Khula-starts Clients = 26 041
– Males 13% Females 87%– Black 100% White 0%– Rural 95% Peri-Urban 5%– 6 Provinces (Excl WC,NC,FS)
Jobs created = 50 000 (Approx)
Loans Representation in S.A. Limpopo 2 RFI’s; 2MCO’s
North West 1 RFI; 1 MCO
Gauteng 7 RFI’s; 1 MCO
Mpumalanga 3 RFI’s; 5 MCO’s
Freestate 1 RFI; 0 MCO’s
KwaZulu Natal 3 RFI’s; 5 MCO’s
Northern Cape 1 RFI; 0 MCO’s
Eastern Cape 2 RFI’s; 4 MCO’s
Western Cape 2 RFI’s; 0 MCO’s
Required capital is obtainedSeed activities are inherent risk mitigation
mechanisms of Khula balance sheet. [network and capacity support of RFI’s and quality mentoring]
Investment levels are necessary to off-set the price shortfall results.
A stable and committed human resource especially at senior level is achieved.
Summary of Assumptions
Summary of Assumptions
Political support is unwavering [all government levels] and based on sound corporate administration.
Access to markets becomes sensitive to SMME needs. [Government and state enterprise procurement systems adapt]
Financial institutions [including insurance houses] do come to the party
Sizwe Tati
Managing Director
Khula Enterprise Finance (Pty) Ltd
25/03/03
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