1. Presentation to Portfolio Committee on Small Business Development: Status of Isivande Women’s Fund (IWF) as at 31 March 2015

2. AGENDA Introduction & Background Objectives of the Fund The Fund Criteria Fund activity to date Challenges and Lessons learnt Conclusion

3. INTRODUCTION & BACKGROUND Isivande Women’s Fund (IWF) is an initiative of the Department of Small Business Development (DSBD) having been migrated from the Department of Trade and Industry (the dti); IWF was introduced as a response to challenges faced by women with regard to limited access to finance for women that inhibits the establishment, growth, sustainability and profitability of women’s enterprises; IWF was launched in 2007, but due to delays in implementation could not get off the ground smoothly until 2010; In May 2010, the dti entered into an Memorandum of Agreement (MoA) wherein the dti appointed the IDC to be the owner and facilitator of the Fund as well as to provide Technical Support for effective period of eight (8) years.

4. INTRODUCTION & BACKGROUND IDC temporary took over the management ( trial phase) but IWF criteria was mostly below IDC mandate so it was decided to outsource the management of the fund (through the provision of the MoA) A tender for IWF’s management was issued and won by IDF Managers who were appointed to manage IWF with an initial R45 million with IDC’s supervision; Fund size and Management Fees Initial R45 million (A further R20 million was approved in Dec 2013 and hence total funds under management is now R65 million;

5. INTRODUCTION & BACKGROUND IDC Management Fee of 2% on the aggregated sum of amounts standing to the credit of the IDC bank account in the relevant financial year; The Fund Manager’s fee of 3% of the committed capital is paid annually, and so based on the tenor of this IWF partnership agreement being 8 years, it should be (3% x R65 000 000 x8=R15 600 000). IDF Managers was established in March 2008 and currently manages funds for sefa, Shell South Africa and Government (IWF) totalling R149m. An 8-year period comprising of 4-year investment period and 4-year divestment period was proposed for IWF;

6. FUND 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

7. FUND OBJECTIVES Achieve the targeted portfolio returns of 0% nominal IRR to ensure long term sustainability of the Fund; (in other words a nominal return equal to inflation). i.e. the fund manager is expected to achieve a portfolio return of say, at least 6% if the average inflation for the 8 year period is 6%. In that case, the capital is not dwindled by inflation and anything above inflation is shared in the ratio of 35%:65% between the Fund Manager and the investor respectively. This is an incentive for the Fund Manager to perform and partake in the upside of the fund.

8. FUND CRITERIA Invest only in portfolio/investee companies that qualify as SME’s; Invest between R30k and R2m per transaction; 50% plus 1 of the ordinary share capital must be held by women; 30% or more of the management positions shall be held by women; At least 80% of the funds to go to black women owned businesses; Businesses must be commercially viable; At least 30% of the fund to be invested in rural and peri-urban areas;

10. FUND PERFORMANCE IWF TOTAL PORTFOLIO Total Fund SizeR65 000 000 Management Fee budgetR15 600 000 Net Funds for InvestmentR49 400 000 Funds CommittedR35 045 735 Uncommitted FundsR14 354 265 Disbursements to ClientsR28 849 715 Undisbursed FundsR6 196 020 Portfolio at Risk*R6 017 104 Repayments Received * 21% of Portfolio at Risk is impairments and the rest write offs. R7 306 261

11. FUND PERFORMANCE

12. Employment creation The total number of funded companies since inception is 45 (including 3 follow-on transactions). This has resulted in the creation of 155 new jobs and sustained 394 existing jobs.

13. SECTORAL SPREAD

14. GEOGRAPHIC SPREAD

15. PERFORMANCE TARGETS/ACTUALS PERFORMANCE TARGETS / ACTUALS as at 31 March 2015 QuarterTarget (no. of deals) Actual (No. of deals)Value of Actual Quarter 146R6 129 100 Quarter 264R2 340 000 Quarter 344R2 450 040 Quarter 420R0 1614R10 919 140

16. PERFORMANCE PLAN PROJECTIONS MULTI –YEAR PERFORMANCE PROJECTIONS Strategic Goal/ Objective Outcome Strategic Objective Performance Indicator Baseline Information Performance Targets 2014/152015/162016/17 Grow a dynamic SME sector Increase level of investment in black women owned businesses Value of approved transactions R32.98m R16.35mR5mR0

17. PERFORMANCE PLAN PROJECTIONS  The figures demonstrate that the fund has disbursed most of the funds available for investment, excluding the fund management fees for an 8 year period.  The budget also demonstrates that the additional capital commitment of R20million is likely to be fully committed within the first half of the 2015 calendar year.

18. LESSONS LEARNT IWF must be willing to take higher risk in businesses; Higher risk projects will subject the Fund to high levels of write off and impairment leading to lack of long term sustainability; Simplify the application process – more away from private equity approach; Simplify the qualifying criteria; Business support critical to the success of nature of business funded;

19. LOOKING FORWARD  Simplified legal agreements – basic grant or loan agreements;  Quicker turnaround times;  Enhanced marketing strategy to attract deal flow;  The fund will be fully committed before the end of the next financial year 2015/16.

20. Industrial Development Corporation 19 Fredman Drive, Sandown PO Box 784055, Sandton, 2146 South Africa Telephone 011 269 3000 Facsimile 011 269 2116 E-mail callcentre@idc.co.za Thank you