ANNUAL RESULTS for the year ended 31 March 2013 Parliament Portfolio Committee Economic Development 25 October 2013 Cape Town

1.Introduction 2.Loan Product Portfolio Performance 3.Human Capital Management 4.Corporate Governance 5.Financial Performance 6.Corporate Performance against Target 2 Presentation Outline

Introduction 3 Establishment Target market sefa was established in April 2012 with the merging of Khula, Samaf and IDC small business lending activities. It is a fully owned subsidiary of IDC focussing on small business development. Its first year of operations was characterised with a focus on implementing the merger, including organisational change management, human capital integration, IT systems and processes and the development of enterprise-wide policies and procedures. These processes have laid the foundation for sefa to deliver on its key strategic objectives. sefa’s target market consists of those small businesses not served by the existing formal banking and finance sector within the following categories: Survivalists and microenterprises –loans of between R500 and R Small enterprises – loans between R and R Medium enterprises – loans between R and R

Loan Product Portfolio Performance

Loan Product Portfolio Mix

9 Regional Offices 6 Financial Intermediaries 7 Equity / Specialised Funds 4 Banks 13 Micro-Finance Institutions 10 Financial Service Co-operatives Delivery Structure/ Channels

Loan Products Performance 2011/132012/13 Full YearFull Year - Actual Full Year - Targets ex- Khula and ex- samaf sefa ApprovalsR211.1mR439.6mR560.0m DisbursementsR143.0mR198.0mR451.0m No. of Jobs created ** No. of SMMEs financed ** ** Method of calculation changed from a general average to a financing specific

Loan Products Performance

Impact Indicators Development Impact Indicators IndicatorTargetActual Facilities disbursed to youth-owned years old30% 16.5% Facilities disbursed in priority rural provinces45%45.4% Facilities disbursed to women-owned businesses40%39.8% Facilities disbursed to black-owned businesses70%78.1% Facilities less than R250K disbursed to end-users40%45.4%

Development Impact of Loan Product Portfolio

Approvals and disbursements

Sector analysis

sefa Outreach and stakeholder Participation  Roadshows  sefa led Roadshows together with seda, SARS, NYDA, IDC, dti, EDD, Provincial Development Corporations and Local Government LED units and local Chambers of Commerce  15 Towns and 8 Provinces  ± 2488 Entrepreneurs  Message – marketing of sefa products and other government SMME services  Stakeholder Feedback  Access to sefa office (visibility and accessibility in small towns)  Loan/ Disbursement process (Turnaround times, Document requirements)  Interest Rates  Access to loans, < R50k (Micro-finance Institutions  Customer Channels  Online Enquiries – 887  Call Centre  Regional Office Offices- 2426

Success Stories

Success Stories - Microfinance Through Tetla, based in the Western Cape (MFI), funding was made available to Vuyiswa Bheyi, who started her fruit and vegetable stall. Vuyiswa is self-employed and able to provide for her family

Success Stories – Retail Financial Intermediary Through the disbursement made to Retmil (RFI), funding of R1.8m was provided to SSS Security services The company was able to employ additional 1,400 staff members

Success Stories - Direct Lending Magdeline Paledi, the COO of MMJV, obtained a bridging facility of R3 million, which enable the Joint Venture to honour the contract received from Anglo American. The funding assisted in the development of a village school in Burgersfort.

Success Stories – Direct Lending sefa provided a bridging loan of R3 million to BBT construction. The funding enabled BBT to service large construction contracts and contributed in sustaining employment for 165 staff.

On Point Manufacturing The company is involved in manufacturing of steel and fabrication as well as engineering design. It was awarded an order to manufacture conveyor belt components for a platinum mine. The business operates from Steelpoort in the Sekhukhune district in Limpopo. This youth-owned business received R funding from sefa. Lee 0108 Trading Enterprise Miss Lungile Nkosi operates a slimming clinic in Centurion, Gauteng. Female youth owned enterprise The clinic provides a non-invasive slimming treatment. sefa provided R funding for the business. Success Stories – Youth

Human Capital Management

Level MaleFemale Total BlackColouredIndianWhiteBlackColouredIndianWhite Executive Manager Professional Administrative Support Total Establishment Profile Black representation constituted 92% and female employees 69% of sefa staff. Human Capital Management performance was informed by following: Establishment and approval of the organisational structure Transfer and placement of employees into the new organisation Implementation of change management programmes Relocating to new office Development if conditions of employment, human capital policies, procedures, processes and systems

Corporate Governance

sefa’s corporate governance is informed by: –Public Finance Management Act –King Report on Governance for South Africa 2009 (King III) –Companies Act, No 71 of 2008 Appointment of Board of Directors (BOD) is informed by the Memorandum of Incorporation - between 5 – 15 directors Shareholder – IDC appoints the BOD Unitary Board – one Executive Director and 10 Non-Executive Directors BOD is responsible for : –Setting economic, social and economic direction through strategic objectives and key policies and –Monitors performance through structured quarterly performance via board sub-committees and regular BOD meetings.

Financial Performance

Statements of Financial Position as at 31 March 2013

Statements of Comprehensive Income for the year ended 31 March 2013

Assets

Income Income is mainly derived from: Property rentals, Dividends, Interest

Expenses

Building sefa – The Way Forward  Improving Organisational Efficiencies  Improving Turnaround Times  Improving the sefa Balance Sheet  Cost to Income  Post Investment Monitoring Service (Bad Debt and Impairments Management)  Strengthen Human Capital Management  Policies, procedures, processes and systems  Stabilizing the labour relations environment (Co-operation with the union)  Organisational Change management and culture (embedding the merger)  Performance Management  Skills Development (Developing sefa’s core competencies)

Building sefa – The Way Forward (Cont)  Investment in target programme initiatives  Youth (Fund/ Scheme)  Micro-Enterprise Supplier Credit  Fresh Produce Markets  Construction (Building Material)  Clothing and Textiles  Retail (Wholesale and Manufactures)  Geographic enterprise development Initiatives  Co-operatives  Bakery Enterprises (Rural Women)  Structured financing packages for Co-ops  On-lending financial support for Financial Savings Co-operatives  Investing in strategic partnership  seda, SAICA, Provincial Development Corporation,  Private Sector (supplier development

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