South African Micro-finance Apex Fund sa maf ANNUAL REPORT 2009/10

1. South African Micro-finance Apex FundsamafANNUAL REPORT2009/10

2. Contents • Acronyms • Mandate, Vision, Mission, Objectives & Values • Products and Services • 2009/10 Performance • 2009/10 Financial Performance • Auditor General Report • Governance Structures • Improving Effectiveness & Efficiencies

3. Acronyms

4. 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 creation of working markets for the enterprising poor; and • Building a strong, effective and efficient Apex Fund.

5. 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

6. 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.

7. Objectives • 1.Contribution to poverty alleviation goals through; • Funding Intermediaries( Enterprise loans and poverty alleviation loans) • Capacitating Financial Intermediaries • Regulation and Prudential Standards • 2. Exceed our stake holder expectation through; • Improving outreach through expanded satellite network/offices • Improving internal turnaround standards • 3.Improvement of processes to achieve service delivery excellence through; • Improving financial reporting and management • Strengthening risk management • Increased compliance of legal and other regulations • 4. Leverage performance through capacity and people through; • Organisational Development • Balance Scorecard & Performance Management • Organisational Design & Change Management • 5. Building sustainable Apex Fund • Improved quality of lending portfolio and internal control environment

8. 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.

9. Products and Services • samaf offers three main products and services namely Financial Support and Non-Financial support. • Financial Support: • 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 fund - 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. • Saving mobilisation and formalisation grant fund: This grant is not linked to the loan and is given to FSCs up to a maximum of R200 000. • Non- Financial Support • 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.

10. 2009/10 PERFORMANCE

11. 2009/10 PERFORMANCE

12. 2009/10 PERFORMANCE

13. 2009/10 PERFORMANCE

14. 2009/10 PERFORMANCE

15. Yearly Performance Comparison

16. 2009/10 Performance by Province Disbursements - Provincial Split (R’m) as at 31 March 2010

17. 2009/10 Financial Performance Statement of Comprehensive Income

18. 2009/10 Financial Performance

19. 2009/10 Financial Performance

20. Auditor General Report Corrective actions taken on AG report Qualification [1] Evidence to substantiate substantial value of the journals finalised (i.e. R1, 683m of the R1, 701m – R18k still being investigated) – evidence not audited yet. [2] Disciplinary against one official finalised & the other currently being processed. Emphasis of Matter [1] Monthly verification of has been implemented to prevent restatement of figures. [2] Disciplinary actions taken against two staff who were involved in the irregular expenditure and another is outstanding. [3] Improved controls in both disbursement and monitoring of FIs have been implemented to curtail impairments. There will also be a continuous monitoring and evaluation of the adequacy of these controls [4] The non consolidation of FI’s has been resolved by amending the contracts. 20

21. Auditor General Report Corrective actions on AG report Report on other Legal and Regulatory Requirements [1] Processes have been implemented to manage performance information by collectively setting targets. Progress also reviewed quarterly by management as a collective through workshops, wherein verifiability of perform targets are confirmed by the relevant managers. [2] A mid-term review will be conducted by the internal auditors to confirm that the performance adheres to require standards. [3] Any changes to targets will follow the required approval processes. [4] The non consolidation of FI’s has been resolved by amending the contracts. 21

22. Governance Structures The following governance structures are in existence at samaf 22

23. IMPROVING EFFECTIVENESS – Service Delivery • Implementation of weekly milestones on a 4 week rolling plan; • Conducting benchmarking for skills and systems gaps in FIs; • Implemented Quarterly FI Forums; • Currently reviewing products and services for developmental focus; • An intensified outreach program. • Investigating special products to support distressed FIs.

24. IMPROVING EFFICIENCIES – Administration • Quarterly performance reviews instead of half year reviews have been implemented; • Implemented improved internal controls in the finance unit; • Beefing-up performance monitoring measures with appropriate sanctions on non-performance; • Monitor turn-around times through IT system tracking mechanism; • Embarked on skilling samaf personnel on microfinance .

25. 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 25

26. samaf NATIONAL FOOTPRINT

27. Thank You