PRESENTATION TO THE PORTFOLIO COMMITTEE ON TRADE AND INDUSTRY PRESENTED BY MR SIPHO ZIKODE : DEPUTY DIRECTOR GENERAL BROADENING PARTICIPATION DIVISION DATE: 26 JULY 2012

ISIVANDE

BACKGROUND INFORMATION FUND OBJECTIVES BUSINESS & TECHNICAL SUPPORT ISIVANDE WOMEN’S FUND INDEX BACKGROUND INFORMATION FUND OBJECTIVES BUSINESS & TECHNICAL SUPPORT FUNDS DISBURSED TO DATE FUNDS APPROVED CHALLENGES FORWARD LOOKING

BACKGROUND INFORMATION An exclusive women’s fund that aims to accelerate women’s economic empowerment by providing affordable, usable and responsive finance than is presently the case. Isivande Women’s Fund (IWF) assists with business support services to enhance the success of the business. The Fund pursues deals involving start up funding, business expansion, business rehabilitations; franchise and bridging finance.

FUND OBJECIVES OBJECTIVES Invest in businesses based in South Africa and owned and managed by women; Build and develop women-owned businesses; Promote and develop entrepreneurship in rural and peri-urban areas; and Achieve the targeted returns to ensure long term sustainability of the Fund. 5

BUSINESS AND TECHNICAL SUPPORT The Isivande Fund has set aside an amount for the provision of business support services to its clients. “IDF Managers” has established strategic relationships with leading business support service providers to ensure the efficient delivery of this much needed service.

FUNDS DISBURSED TO DATE Investment Size (Excluding Business Support) Funds Allocation No of approvals to date Total amounts R30,000 to R100,000 ≤5% 1 R60,000 R100,001 to R250,000 ≤15% 2 R390,000 R250,001 to R1,000,000 ≤50% 8 R4,835,000 R1,000,001 to R2,000,000 ≤30% R3,922,319 Totals 13 R9,207,319 7

GEOGRAPHICAL SPREAD GEOGRAPHY APPROVALS SPREAD DISBURSEMENTS SPREAD Gauteng 44.20% 26.35% North West 12.49% 0.00% Free State 2.61% 2.52% KwaZulu-Natal 30.82% 22.32% Northern Cape 9.23% 48.80% Eastern Cape 0.65% Total 100.00% 8

TARGERT PERFORMANCE Targeted disbursements per original proposal 15% in Year 1 = R5.13m 30% in Year 2 = R10.26m 30% in Year 3 = R10.26m 20% in Year 4 = R6.84m 5% in Year 5 = R1.7m Actual disbursements in Year 1 R3.7m = 11% 4% below target

CHALLENGES The Fund is performing below expectations; The Fund Manager is not in a position to meet the high levels of expectations by the dti; The current Fund management model is not suitable for IWF’s requirements; and “IDF Managers” has a general approval rate of roughly 2 out of every 100 enquiries, or even less at times.

FORWARD LOOKING Increased size of funds will enable an increase in reach; Change funding model; Creation of separate Seed Capital Fund for Nascent businesses – grant and soft loans; Allocation of dedicated resources for the Seed Fund; Simplified legal agreements – basic grant or loan agreements; Quicker turnaround times by front loading most of the work; Pricing to be compared to other funders to improve competitiveness; Strengthen other value adds – business and technical support, market access; and New marketing strategy to attract proper deal flow.