PRESENTATION TO PORTFOLIO COMMITTEE SITEMBELE MASE : CEO samaf BY SITEMBELE MASE : CEO samaf ON DATE: 10 October 2007

INTRODUCTION FORMATION –letter from National Treasury to the dti April 2006 launched Policy intervention on: Poverty alleviation Employment Entrepreneurship Access to finance

Framework Empirical evidence of successfully inteverntions in india, bangladesh, chile ,bolivia ,kenya ,uganda and others. More than 40 years of interventions. Not a social grant for destitute but for the working and enterprising poor engaging in economic activities. Must facilitate asset building and integration of the working poor into mainstream banking and financial markets Fund is structured as wholesale loan and capacity grant (the spear and the sharpner)

To provide accessible and affordable financial services through: MANDATE To provide accessible and affordable financial services through: Development of sustainable financial intermediaries that reach deeper and broader to the enterprising poor Facilitation of training and capacity building for micro-entrepreneurs and financial intermediaries. Ensuring effective financial intermediation and working markets for the working and enterprising poor.

MISSION To provide competitive, professional and customised wholesale financial services to intermediaries that reach deeper and broader.

MEETING THE DEVELOPMENT MANDATE

FINANCIAL PERFORMANCE Budget (R’000) Actual (R’000) Compensation to employees 10 000 9 856 Goods and services 40 200 13 447 Transfers 65 000 19 831 Payment for Capital Assets 13 000 986 Software licenses and intangible assets 1 800 66 TOTAL EXPENDITURE 130 000 44 186 Interest received 595 Sundry income 1 TOTAL INCOME 596

DELIVERY NETWORK TOTAL Province Delivery Network Approvals/ Committed On-lending Disbursements Capacity Borrowers No. of savers North West 4 R 6,450 000 R 1, 071,000 R 700,000 352 3 810 Eastern Cape 3 R 17,400,000 R 480,000 R 400,000 310 330 Free State 2 R 2,600,000 R 360,000 R 512,500 469 684 Gauteng 6 R 7,950,000 R 3,960,000 R 6, 855,000 1 093 556 Kwa-Zulu Natal R 5,200,000 R 240,000 R 310,000 142 4 801 Limpopo R 720,000 R 759,000 440 1 965 Mpumala nga R 1,748,000 699 1 157 Western Cape R 480,000 R 535,600 841 1 050 Northern Cape TOTAL 31 R55,200,000 R9,059,000 R10,772,100 4 346 14 353

Graph 7.1

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Demographics 7.4

HR ISSUES 46 staff member were employed 12 HO 34 Provinces Salaries are paid as per Public Service Act No performance bonuses have been paid Employment Equity 35% women senior management

Challenges 1. Qualification Due to: Grant payment of 3.8 mil Expenses of R273,000 with insufficient audit evidence Non-consolidation of funded institutions (P.O.) into samaf group financial statements in accordance with IAS 27 (AC 132) The standard considers samaf to have a financial and legal control on the entities that we funded

Challenges continue… 2. Efficiency and Effectiveness samaf has operated within budget although the actual transfer to Partner Organisations has been low and the approvals were high The approval for transfers was 55.2 million vs. R65 million budgeted This is as a result of lack of capacity and quality reports from the intermediaries thus resulting in slower draw downs LEGAL STATUS of samaf

Improvement plan 1. Strategy structure alignment:- New and improved functions have been introduced to enable samaf to operate efficiently Due diligence and Portfolio management IT for integrated and reporting requirements Outreach functions are being rationalised for better performance Note: These amendments have been submitted for approval

Improvement plan continues… 2. Improvement in Governance Appointment of Credit and Risk committee Implementation of Risk Management Framework Implementation of the Performance Management System Implementation of improved business process , policies and procedures Identification and acquisition of an appropriate IT/MIS reporting system Improvement in the capacity building programme for Financial Intermediaries (PO)

THANK YOU