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South African Micro-finance Apex Fund sa maf ANNUAL REPORT 2009/10. Contents. Mandate Vision, Mission & Values Products and Services Auditor General Report What has samaf done since inception 2009/10 Performance 2009/10 Financial Performance Human Resources Report
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South African Micro-finance Apex FundsamafANNUAL REPORT2009/10
Contents • Mandate • Vision, Mission & Values • Products and Services • Auditor General Report • What has samaf done since inception • 2009/10 Performance • 2009/10 Financial Performance • Human Resources Report • Effective Use of New Technology • Supply Chain Management • Corporate Governance • Challenges
Mandate • Contribute to Government’s poverty reduction goals by acting as a catalyst for the development of an effective micro-finance sector through: • Support for the establishment of sustainable micro-finance institutions that can reach deeper and broader to the enterprising poor; • Facilitating the establishment of an enabling environment for effective financial intermediation and facilitation of working markets for the enterprising poor; and • Building a strong, effective and efficient Apex Fund.
Vision samaf envisions a country in which a network of sustainable micro-finance institutions broadens and deepens access to affordable financial services by the enterprising poor. This is achieved when: • Active participation of enterprising poor in economic activities is robust and bears fruit; • Reduction of financial troughs for a better livelihood; • Sustainable Financial Intermediaries (FIs); • Adoption of best practise models; • Competent employees; • Utilisation of systems in delivery of services; and • A financially sustainable samaf
Mission • Provide developmental financial and non-financial services to FI’s (MFI’s & FSC’s) through: • The effective mobilisation and wholesaling of capital for micro-finance institutions with proven potential; • The development of human capital in the economic environment through capacity building and institutional development; • Contribute to policy development with respect to micro-finance to inform and support samaf staff, its partners, and stakeholders; and • The development of valuable partnerships between business, Government and the community.
Values • The following values will underscore samaf’s behaviour as it strives towards the achievement of its mandate, vision and mission: • Integrity - Dealing with stakeholders in an honest and ethical manner; • Transparency - Ensuring compliance to best practice on the dissemination and sharing of information with all stakeholders and consult with them to ensure comprehensiveness and buy-in to samaf activities; • Professionalism - Adhere to specific defined norms and setting standards of workmanship, respect, and communication; • Accountability - Taking responsibility for the decisions and actions, including allocation of powers and duties; and • High Performance - Excellent performance and satisfied customers that guarantee long term sustainability of the South African Micro-Finance Apex Fund.
Products and Services • samaf offers three main products and services namely Financial Services ,Technical Support and FSC Supervision. • Financial Services: • Loans - samaf can provide loans to a maximum of R10 million to its FIs, who in turn can provide loans to its clients up to a maximum of R10 000. • Capacity building - the following are the capacity building interventions that samaf offer: • Loan linked grant: MFI’s receive a maximum of 50% of the total loan amount approved whilst FSCs receive a maximum of 170% of the loan approved. • R200 000 grant: This grant is not linked to the loan and is given to FSCs that are still to be capacitated in terms of training and operational costs. • Technical support: samaf staff provide technical support such as the development of operational policy documents, training of FSCs, etc. • FSC Supervision: samaf is mandated to regulate and supervise all FSCs in South Africa in terms of Exemption Notice 887 of the Banks Act.
Auditor General Report • Basis for qualified opinion • A number of journals were passed during the system implementation process. Management failed to provide sufficient and appropriate explanation to substantiate journals. • Emphasis of matter • Auditor General opinion is not modified in respect of the following matters: • Restatement of corresponding figures • Irregular expenditure • Material impairments • Non-consolidation of controlled Financial Intermediaries 8
Auditor General Report - continued • Report on other Legal and Regulatory Requirements: • The following findings were issued: • Non-Compliance with regulatory and reporting requirements • Lack of effective, efficient and transparent systems and internal controls regarding performance management. • Usefulness of reported information. • Changes to planned performance information not approved. • Planned and reported performance targets not verifiable. • Reliability of reported Information. • Reported targets not valid, accurate ad complete as inadequate supporting source information was provided. 9
What has samaf done since inception • Despite not having a local benchmarking model, the entity has to date built a network of 51 FI’s, directly benefiting 35 844 very small survivalist entrepreneurs with total loans of R49,8m. • samaf has spent R26.3m in grant support to build the capacity of the FIs which extend services to poor communities through their lending and savings mobilisation programmes. • An infrastructure network has been established through samaf’s nine (9) provincial offices. • samaf employs 61 people, of whom 34 are deployed in provinces.
2009/10 Performance Demographic Split
2009/10 Performance by Province Disbursements - Provincial Split (R’m) as at 31 March 2010
2009/10 Financial Performance Statement of Comprehensive Income
Human Resources Report Training and Development One Senior Manager and eight (8) Outreach Coordinators were identified to go on a Micro-finance Course at the University of Pretoria Staff Turnover Rate The staff turnover rate for the year ended 31 March 2010 was 1.3%. 25
Human Resources Report - continued • Financial Misconduct • Disciplinary action is being taken against those found guilty of Financial Misconduct. • Project Bokamoso • The project was commissioned to map a clear strategy in order to shape the organizational culture into performance driven environment. The project was structured to address samaf challenges through five work streams as follows: • Organizational design and structure; • Balanced scorecard; • Talent Management; • Performance Management; and • Change Management 26
Effective Use of New Technology • Upgrade of Productivity Tools • The following productivity tools were implemented during the period under review: • Microsoft Office 2007 • Symantec Anti-Virus • Symantec Back-Up Exec • ERP Implementation • A project was initiated to implement a ERP system with the following modules: • AccPac – Financial Management • Assetware – Asset Management • VRM – Vendor Relationship Management • eWorkflow – Automation of Procurement Process • Only AccPac was implemented during the year under review 27
Supply Chain Management The supply chain management process performed satisfactorily. There were deviations from the policy and procedure by samafofficials. 28
Corporate Governance There has been steady progress in the refinement and improvement of corporate governance at samaf, particularly with respect to the operations of the key governance structures. 29
Challenges • Appropriate skills, leadership & accountability at senior levels within samaf • Lack of skills within the micro-finance sector • Sustainability of FI’s (MFI’s & FSC’s) • Turnaround times • Cumbersome systems & processes • Ineffective reporting & performance management systems • Profit margin for start-ups is small. • Deposit taking insurance – samaf FSC’s not covered in terms of the Bank Insurance Act. • Challenges in Provinces due to socio-economic conditions. 30
