Khula Enterprise Finance LtdKhula’s Quarterly Performance for the period ending
30th June 2010 Parliamentary Portfolio Committee
Venue: Parliament: Cape Town
24th August 2010
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Presentation Outline
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Introduction
Performance of Retail Financial Intermediaries
Performance of Funds
Performance of Indemnities & Properties
Mentorship Programme
Pipeline Projects
Khula’s relationship with IBA
IBA Membership by Province
Conclusion
Introduction
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The period under review has experienced significant changes. Some of the important changes are:
Appointment of the new Board Reporting to the new ministry Economic Development Department
These changes have had an impact on the performance and confidence of staff because of uncertainty of the future.
The arrival of the new Board has had a bearing on the business of since Khula management spent time familiarizing the new Board with Khula operations and getting Board to give a directive on the strategy instead of pushing deals and business.
The fact that economy is recovering from the global crunch which also had an influence on SMEs performance in the country did not make the situation better.
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BUSINESS LOANS
Committed
Opening
Balance
Approval
s YTD
Disbursed
2009/10 Balance
01 April
2010
30 June
2010 30 June 2010 30 June 2010
Marang Financial Services R10,000,000 R- R-5,000,000 R5,000,000
Vengrow (Bluedot) R20,000,000 R- R- R20,000,000
Blue financial Services R50,000,000 R - R50,000,000
New Business Finance (Pty) Ltd R15,000,000 R- R-4,000,000 R11,000,000
Retmil Financial Services R- R- R- R -
Small enterprise finance R- R- R- R-
SupplyFin (Pty)Ltd R10,000,000 R- R10,000,000
Mettle administration Services (Pty)
Ltd R30,000,000 R- R- R30,000,000
Entrepreneur Growth fund R30,000,000 R- R- R30,000,000
Cape Capital Investment & Finance R20,000,000 R- R-5,000,000 R15,000,000
R185,000,00
0 R- R-14,000,000
R171,000,00
0
Performance of Retail Financial Intermediaries
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Disbursements of Equity Funds as at 30 June 2010
Anglo-khula R -
Business Partners-Khula Start up Fund R 8,832,000 Khula-Enablis Loan Fund R - Khula-Enablis SME Acceleration Fund R 500,000 Shoprite Checkers Franchise R - Khula SME Fund trust R -
Izibulo SME Fund R - Identity Development Fund R 2,888,935
Small business Growth trust fund(Fabcos Fund) R 3,143,000 Akwandze R - ECDPW (BFPA-managed fund) Emerging contractors R - LEF (Limpopo & Mpumalanga) R - R 15,363,935
Performance of Funds
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Performance of Indemnities & Properties
Flow of business: April – June 2010
product Approval disbursements
Credit indemnities R8,969,055
R3,914,183
Properties R28 000,000
Total R36,969,055 R3,914,183
Approval of R28m was earmarked and targeted for
investment in the Gugulethu Shopping Centre in the
Western Cape Township
Mentorship Programme
Pre-Loan 5 business loans were developed at a
cost of R26 050.
Post-Loan Cost of post-loan interventions
amounted to R63 790
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State owned Enterprise Procuremtn Programme - R100 million.
Utho Capital fund - R30 million – Utho seeks to create a niche construction Fund that will inves in SMEs.
Pipeline Projects
TERM
TRANSACTION SIZE
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Khula has a relationship with the institute of Business Advisors (IBA).
IBA also recruits mentors in deep rural areas – this has benefited Khula though there has been a shortage of mentors in these areas.
IBA’s main focus is accreditation and upgrading of business advisory skills.
Khula’s relationship with IBA
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IBA Membership By Region Number Percentage
Eastern Cape 76 16.1%
Free State 28 5.9%
Gauteng 181 38.4%
KZN 35 7.4%
Limpopo 26 5.5%
Mpumalanga 28 5.9%
N/Cape 13 2.8%
Northwest 28 5.9%
Western Cape 56 11.9%
TOTAL 471 100%
IBA Membership by Province
Conclusion
A number of reasons why the organisation has not performed well in the period under review. Some of these reasons are:Khula’s reliance on the intermediaries to get its products to the end user.
The maturity of some products that need to be reviewed.Getting rid of the cradle to grave” approach and establishing a proper Risk Management Unit
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THANK YOU
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