Peter Mageza (Group COO, ABSA-Barclays Group, South Africa)

1. Peter Mageza (Group COO, ABSA-Barclays Group, South Africa) NDB’s: Crowding in the private sector

2. ABSA PROFILE The Absa Group Limited (Absa), listed on the JSE Limited, is one of South Africa's largest financial services groups offering a complete range of banking, banc assurance and wealth management products and services. Absa's business is conducted primarily in South Africa and on the Africa continent, where it has equity holdings in banks in Mozambique, Angola, Tanzania, Namibia and Zimbabwe. At 30 June 2006, Absa had assets of R466,6 billion, more than 720 physical outlets, 8,1 million customers, 6 256 automated teller machines and 34 688 permanent employees. Absa employs a customer-centric business model with targeted business units serving specific market segments. The Group interacts with its customers through a combination of physical and electronic channels. Absa became a subsidiary of Barclays Bank PLC on 27 July 2005, when Barclays acquired a controlling stake in the Absa Group. Barclays is an international financial services group engaged in retail and commercial banking, credit card issuing, investment banking, wealth management and investment management services.

3. “WHY ABSA & IDC DECIDED TO DANCE TOGETHER” • Absa Vehicle & Asset Finance expertise in Commercial Transport Sector • JV’s and Alliance as a model • Commercial alliances e.g. MAN/Nissan Diesel/Volvo/Tyco/Tata – together represents market share of 50%*. • Why alliances as a model • Manage our risk • Sharing of risk i.t.o. Residual Value through the remarketing/buy back agreement. * NAAMSA Oct 2006

4. ECONOMIC ENVIRONMENT • E.P.W.P. (Expanded Public Works Programme) helps generate entrepreneurs who are targets of our relationship. • Promotes BEE and Entrepreneurial Development • Job creation at the least sophisticated developmental environment

5. ABSA’S ESTABLISHED EXPERTISE • Established assessment and management of credit risk expertise • Credit monitoring and control procedures • Relationship with manufacturers • Distribution channels and footprint • Expertise in SMME market through established Black Business Development Unit • Working capital management

6. HOW ABSA & IDC CREATED THE ‘ABSA / IDC FINANCE SCHEME’

7. TARGET MARKET SA Transport Operators of Goods, Passengers or Commodities who are • Black Owned or Black Empowered Companies • Emerging black entrepreneurs • Established black entrepreneurs • Road freight transporters • Owner drivers • Entrepreneurs under a mentorship programme. This however excludes the Taxi Recapitalisation Programme and contracts outside of South Africa

8. SALIENT FEATURES OF SCHEME • Objective of the Finance Scheme • Absa and IDC have agreed to enter into a funding initiative to promote BEE in the small and medium enterprise sector. The Finance Scheme will allow Absa to provide funding to target market with a Transport Contract and IDC will provide 50% (fifty percent) pari passu guarantee on all losses incurred by Absa. • Provision of Asset Finance and Working Capital • Asset finance is provided to BEE entrepreneurs and a short term lending facility which is limited to the lesser of 3 (three) months operating expenses of the BEE Entrepreneur and 10% of the total asset finance required. Total amount available to finance BEE entrepreneur is R30 million

9. ROLES & RESPONSIBILITIES

10. ABSA • Support and promote the Finance Scheme • Make available working capital and sufficient funds to sell, lease or rent Vehicles to Operators • Absa IDC Finance Scheme is limited to a maximum of R400 000 000 (four hundred million rand) • Inform IDC of areas of mutual concern in relation to BEE financing

11. IDC • IDC undertakes to: • Support and promote the Finance Scheme • Inform Absa of areas of mutual concern in relation to BEE financing • Make available such statistical and marketing information and data as IDC may have available in regard to sales of Vehicles. • Exclusivity to Absa for 12 (twelve) months from the Effective Date • Underwriting 50% of losses incurred by Absa arising from all transactions under the Finance Scheme

12. QUALIFYING CRITERIA • The BEE entity must be part of the Finance Scheme’s target market • A minimum contribution of 2.5% (two point fine percent) in cash on the Vehicle financed. • A Bankable Contract • BEE entrepreneurs with sub contracts will be considered for finance if: • Absa has access to the main contract • The main contractor is a reputable transport company and is approved by Absa • The main contractor is not a broker • All material terms and conditions of the main contract, where applicable, are incorporated in the subcontract • Operators with ITC listings may be considered subject to the materiality and age of the judgement or default. • The shareholders of the BEE entity need to show commitment to the new business by being directly employed by the Operator. Cont….

13. QUALIFYING CRITERIA…Continued… • The BEE entrepreneur must possess a reasonable level of relevant commercial awareness and experience • The relevant insurances must be provided on the Vehicle: • For BEE entities with a request to finance buses, the company must be in possession of a license in respect of that route with the National Department of Transport • Vehicles must be purchased from Absa approved suppliers • VAT input must be paid to Absa. • The securities that will be requested by Absa from the Operator are: • The assets being financed • Cession of the right to receive income under contract in favour of Absa • Cession and pledge of share and loan accounts in the operator • Full negative pledge by the Operator agreeing not to encumber any of the proceeds of the contract • Unlimited suretyship from the shareholders of the operator and • Cession of all insurance policies of the asset

14. REQUIREMENTS OF BANKABLE CONTRACT • The Transport Contract must be a Bankable Contract and must fulfil the following minimum conditions: • The duration of the Transport Contract must be for at least 60% (sixty percent) of the term of the Credit Agreement. • The Transport Contract income must be sufficient to cover the expenses of the Operator’s transport business and to service the repayment to Absa • A minimum amount of work must be guaranteed to the Operator e.g. the number of loads per month. • It must be profitable Transport Contract • Absa must be allowed to be in contact with the Contract Provider • Satellite tracking and vehicle monitoring and control must be installed on all Vehicles that are used for long distance haulage • A maintenance contract must be entered into with the Supplier • The Transport Contract must be reviewed by Absa’s Group Legal Services • The Transport Contract income is to be paid by the Contract Provider into a dedicated Absa bank account in the name of the Operator. • Any subsidy payment received by the Operator must be ceded to Absa • The Operator must ensure that the Vehicles financed are well maintained • The Transport Contract must allow for a cession of the proceeds of the contract to Absa.

15. SHARING OF RISK AND RISK MITIGANTS • Lower Rates through Risk Sharing • Lowered Traditional Barriers of entry – lower deposit @ 2.5% • Maintenance support by suppliers • Management support companies • Working capital without tangible security (reliance on cash flows of contract)