A SUMMARY OF KHULA OUTPUTS TO THE PORTFOLIO COMMITTEE 25 March 2003

1. A SUMMARY OF KHULA OUTPUTS TO THE PORTFOLIO COMMITTEE 25 March 2003

2. High-level Objectives • To make an impact on the transformation of the South African economic landscape by contributing towards the DTI strategic objectives • Facilitate mobilization and directing of resources (public & private sector funding) towards SME development.

3. Core Strategic Objectives • To achieve a return on investment that ensures retention of the capital base. (Finance) • To offer sustainable credit and capital through a network of efficient distribution intermediaries. (Customers)

4. Core Strategic Objectives • Scaling and growing the operations, through managed risk, to achieve impact and outreach. (Finance) • To acquire, develop and retain the human talent to meet the short, medium and long-term needs of Khula. (People) • To develop and implement an integrated business marketing strategy. (Process)

5. Growth Strategies • Mobilise banks for mass or scale delivery. • Training workshops with bankers and marketing • Mainstream and roll-out a credible mentorship • To stimulate the provision of venture [start-up] and small scale equity finance. • To research and package innovative products that can mobilise and attract the financial industry participation in Khula mandate. • Build on nation wide communication campaign

6. Growth Strategies • Segment the market and design a suitable product mix and structure accordingly. • Emerging and matured markets • To support the distribution network in line with market needs. • capacitateand develop to serve the all market segments [from under-banked to bankable enterprises] • To improve outreach and efficiency of emerging market network • Improve market access through business linkage initiatives

7. Where are we ?1996 – 2003 & year ending 2003 [28/02]

8. Where are we ?1996 – 2003 & year ending 2003 [28/02]

9. Where are we ?1996 – 2003 & year ending 2003 [28/02]

10. Credit Guarantees“Numbers”

11. Credit Guarantees“Rands”

12. Khula Equity Funds • Rand value of deal approved = R 18m • Number of deal approved = 11 • Jobs created = 492 • Investee Companies: 83% Male 17% Female 17% Rural 83% Urban 100% PDI

13. Land Reform Empowerment Facility • Funds loaned out to Date = R57 m • Number of projects = 16 • Number of PDI (Shareholders) = 794 • Male 360 Female 434 • Job created = 1,261 • Males 592 Females 669

14. Retail Financial Intermediaries • Funds loaned out to Date = R338 m • Number of RFI’s = 16 • Number of RFI Clients = 165 880 • Male 30% Female 70% • Black 96% White 4% • Urban 70% Rural 30% • Job creation estimate = 948 466

15. Khula-starts • Funds loaned out to Dec 2002 = R17 m • Number of Khula-starts = 17 • Number of Khula-starts Clients = 26 041 • Males 13% Females 87% • Black 100% White 0% • Rural 95% Peri-Urban 5% • 6 Provinces (Excl WC,NC,FS) Jobs created = 50 000 (Approx)

16. Loans Representation in S.A. • Limpopo • 2 RFI’s; 2MCO’s • North West • 1 RFI; 1 MCO • Gauteng • 7 RFI’s; 1 MCO • Mpumalanga • 3 RFI’s; 5 MCO’s • Freestate • 1 RFI; 0 MCO’s • KwaZulu Natal • 3 RFI’s; 5 MCO’s • Northern Cape • 1 RFI; 0 MCO’s • Eastern Cape • 2 RFI’s; 4 MCO’s • Western Cape • 2 RFI’s; 0 MCO’s

17. Summary of Assumptions • Required capital is obtained • Seed activities are inherent risk mitigation mechanisms of Khula balance sheet. [network and capacity support of RFI’s and quality mentoring] • Investment levels are necessary to off-set the price shortfall results. • A stable and committed human resource especially at senior level is achieved.

18. Summary of Assumptions • Political support is unwavering [all government levels] and based on sound corporate administration. • Access to markets becomes sensitive to SMME needs. [Government and state enterprise procurement systems adapt] • Financial institutions [including insurance houses] do come to the party

19. Thank you for your Support Sizwe Tati Managing Director Khula Enterprise Finance (Pty) Ltd 25/03/03