sefa/TEP Presentation Thakhani Makhuvha – sefa CEO 7 May 2016

2 Accessible Development Finance About sefa sefa was established on 1 April 2012 in terms of Section 3(d) of the IDC Act and as a wholly owned subsidiary of the IDC brings together the activities of the three previous structures (Khula, samaf and the IDC small business activities). sefa operates as a DFI to foster the establishment, development and growth of SMMEs and Cooperatives and contributes towards:  poverty alleviation,  job creation,  and economic growth. sefa provides products and services to qualifying SMMEs and Cooperatives as defined in the National Small Business Act of 1996, as amended in 2004.

Values sefa’s values and guiding principles to depend institutional culture and organisational cohesion are: Mandate, mission and values sefa’s mandate To be the leading catalyst for the development of sustainable SMMEs and cooperatives through the provision of finance Kuyasheshw a! We act with speed and urgency Passion for development Solution-driven attitude, commitment to serve Integrity Dealing with clients and stakeholders in an honest and ethical manner Transparency Ensuring compliance with best practice on the dissemination and sharing of information with all stakeholders Innovation Continuously looking for new and better ways to serve our customers Mission Our mission is to provide simple access to finance in an efficient and sustainable manner to SMMEs and cooperatives throughout South Africa by: Monitoring the effectiveness and impact of our financing credit guarantee and capacity development activities Developing (through partnerships) innovative finance products, tools and channels to speed up increased market participation in the provision of affordable finance Delivering Wholesale Direct Lending credit facilities Providing credit guarantees to SMMEs and Coops Supporting the institutional strengthening of Financial Intermediaries so that they can effectively assist SMMEs and cooperatives Creating strategic partnerships with a range of institutions for sustainable SMME development and support

4 Accessible Development Finance Products and Distribution Channels 4 DIRECT LENDING Asset Finance Bridging Loans Revolving Loans Term Loans WHOLESALE LENDING Business Loans Credit Guarantee Scheme Joint Venture Initiatives Land Reform Empowerment Fund Wholesale NON-FINANCIAL SUPPORT Post loan mentoring Institutional strengthening Management and technical support Board representation Commercial & industrial property Commercial Banks Co-operative Financial Institutions Micro Finance Institutions Retail Finance Intermediaries sefa Co-locations sefa Main Offices Strategic Partnerships Structured Finance Solutions SMMEs and Co-operatives CLIENTS DISTRIBUTION CHANNELS PRODUCT PORTFOLIO R – R5 million R500 – R5 million

sefa’s Target Groups Targeted Groups  women,  black people,  youth,  people in rural communities and townships  people living with disabilities. sefa funds in the following sectors Lending policy is informed by government’s economic policy - NGP, IPAP, NDP 5 Services (including retail, wholesale and tourism) Manufacturing (including agro-processing) Agriculture (specifically land reform beneficiaries and contract-farming activities) Construction (small construction contractors) Mining (specifically small miners) Green industries (renewable energy, waste and recycling management) sefa funds qualifying business ventures within the following SMME and cooperatives as defined in the National Small Business Act of 1996 sectors: Target market

6 Accessible Development Finance Geographic Footprint

7 Accessible Development Finance What Makes sefa Different? High appetite for risk in exchange for high developmental impact Provision of capital and/or interest moratorium (Payment Holiday) up to 12 months Financing SMMEs including start up businesses that are often perceived as high risk Addressing the financing gap for loans below R500k Provision of pre and post loan business support Provision of funding to entrepreneurs with adverse credit records provided they can demonstrate active remedy of their indebtedness Lending not solely based on security backing – long term sustainability potential Specific focus on youth owned businesses 7

8 Accessible Development Finance sefa-TEP Ikhwezi Tourism Facility PURPOSE OF FUNDING To fund SMMEs in the tourism sector Access to the tourism sector THE WHOLESALE FUNDING The funding consists of R45 million on-lending facility business loans to entrepreneurs;  Loan sizes of between R to R5 million offered for up to five years; R3 million business support e.g. mentoring and training support for the entrepreneurs

9 Accessible Development Finance Rational for the Partnership  Leveraging the existing technical capacity and national footprint from TEP  Special lending rates offered to SMMEs prime plus 1.60% to prime plus 3.60% depending on risk  High job creation potential of tourism industry.  Technical support provided by TEP  Captive industry with high contribution to economic growth  TEP’s national footprint sefa / TEP

10 Accessible Development Finance Requirements Tier 1 R – R Tier 2 R – R Tier 3 R – R5 million Registered with TEP Statutory Docs FICA documents (Owner) Three months latest bank statement or proof of income Copy of Contract or Order Entrepreneurship skills and experience directly related to the nature of the business Additional requirements Six months latest bank statements Historical Financial Statements and management accounts Majority shareholding(50% + 1 share) must vest with SA citizen or permanent resident and Business must be registered in SA. Valid tax clearance Projected cash flows and costing (quotations) Short CV of owners/directors etc Additional requirements Shareholders’ Personal income and expenditure, Asset and Liability schedule

11 Accessible Development Finance Funded SMME Tsheola Dinare Tsheola Dinare Tours transport services is a tourism company that provides transfers and corporate shuttling. In January 2015 sefa approved a one year revolving facility of R with a capital grace period of a year, monthly interest payments and capital repayable at the end of period.

12 Accessible Development Finance Funded SMME Batsumi Travel Batsumi Travel provides corporate and leisure travel management services. In March 2015 sefa approved a one year revolving facility of R with a capital grace period of a year, monthly interest payments and capital repayable at the end of period.

13 Accessible Development Finance Funded SMME Mtheku Investments Mtheku Investment operates the lodge caters for lodging, conferencing and recreational purposes. In May 2015 sefa approved a term loan of R for 60 months to acquire Mopani Lodge situated 25km from Pretoria.

14 Accessible Development Finance Other initiatives Utilisation of the SAICA/sefa partnership to assist applicants with compilation of financial information sefa extending the facilities’ disbursement period by another two years.

15 Accessible Development Finance sefa Contact Details HEAD OFFICE Centurion Eco-Fusion 5, Block D, 1004 Teak Close, Witch-Hazel Avenue, Eco Park, Centurion, 0157 Tel: (012) | Website:

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