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

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

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

3. 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)

4. MANDATE To provide accessible and affordable financial services through: • Development of sustainable financial intermediaries that reach deeper and broaderto 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.

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

6. MEETING THE DEVELOPMENT MANDATE

7. FINANCIAL PERFORMANCE

8. DELIVERY NETWORK

9. Graph 7.1

10. Graph 7.2

11. Graph 7.3

12. Demographics 7.4

13. 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

14. 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

15. 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

16. 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

17. 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)

18. THANK YOU