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2013 CEO’s COLLOQUIUM

IN JOHANNESBURG, SOUTH AFRICA

OPERATING FORCE-FIELD FOR

CEO’s – LEADS FOR RE-THINKING

THE ROLE AMIDST OVERLOAD OF

EXPECTATIONS

13 – 15 MARCH 2012.

JOHANNESBURG

DUMISANI J. MSIBI

MANAGING DIRECTOR

STRUCTURE OF PRESENTATION

FINCORP Background Information.

High Level Old Standing & Emerging Expectations.

Governance & Ownership

◦ Appointment of Directors Skills base Vs. Expectations

◦ Resource Mobilization International Financial Markets.

Operating Environment

◦ Competition Post Global Crisis precipitated encroachment of Commercial Banks

◦ Climate Change Agribusiness – key to development.

◦ Management Information Systems Not in anyway different from private sector.

◦ Human Capital Competition for skills – competitive remuneration.

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SWAZILAND DEVELOPMENT FINANCE

CORPORATION (FINCORP) The Swaziland Development Finance Corporation (FINCORP) has just

celebrated its 15th ANNIVERSARY having commenced operations in 1996 as a national DFI with the main aim of economically empowering Swazi people at grassroots level through the provision of access to sound and sustainable financial services. Tenor of facilities generally range between 6 and 60 months.

FINCORP is a registered private corporation with two shareholders namely the Swaziland Government and a local investment company, Tibiyo TakaNgwane, holding 80% and 20% shares respectively. The main objectives of FINCORP are:

To finance and promote the development of Swazi-owned Enterprises;

To support the expansion of loan financing to SMEs and To create jobs;

To make a meaningful contribution to the eradication of poverty among people at grassroots level.

To support the provision of business advisory services, training, monitoring, technical transfers and development of other products and services for SMEs;

Cumulative disbursements to date exceed E1.6 Billion since inception to over 60 000 SME Clients transcending across all sectors of the economy.

MISSION STATEMENT

To empower our clients by providing broad-based financial

services to enable their growth and success.

Through

◦ fostering supportive client relationships

combined with

◦ prudence and competence

to become

◦ a financially self-sustaining institution.

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SWAZILAND DEVELOPMENT FINANCE

CORPORATION (FINCORP)

HIGHEST ASPIRATION

“To be recognized and acknowledged by our

stakeholders nationally and internationally as the

foremost business development institution providing

financial services.”

STATEMENT OF PURPOSE

“To economically empower Swazi entrepreneurs through the

provision of accessible and sustainable financial services.”

OUTREACH & SECTORAL

DISTRIBUTION

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Economic Environment

Swaziland is a small landlocked country measuring 17 000 square kilometers with a low population of + 1.012 million people.

Agricultural oriented economy. Basically everybody is a farmer in the

rural areas. 24% of total domestic national debt represents agriculture.

In July 2007, Government convened a National Agricultural Summit which underscored the importance of agriculture as a strategic tool for economic development for the country.

Manufacturing Sector largely dominated by large sized corporations.

70% of the population live in rural areas. 66% of the population live below poverty line.

High rate of unemployment – 42% Dual unique legal environment – Civil and Traditional. (i.e Land

Tenure).

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Opening Statement There is no doubt that the operating

landscape for DFIs has evolved over the years.

The emergence of the global financial crisis has heightened focus on the financial services sector in general – DFIs included.

Regulation of DFIs may no longer be a matter of choice going forward – (certainly in Swaziland FSRA is now in place).

Meanwhile CEOs are sometimes confronted with impediments completely out of their control in delivering on mandates – i.e Country Ratings; Country Risk Profiles; Political Risk which all requires the CEO to think outside the box.

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Old Standing & Emerging High

Expectations from DFIs Poverty eradication.

Job creation.

Financial Inclusion and addressing key market failures.

Cross border financing (FIP) – Regional infrastructure.

Improved Risk Management Mechanisms.

Mobilization of resources for development from multiple sources.

Better co-operation & collaboration among DFIs

Sustainable development.

Issues of profitability vs. economic; social and political development goals.

Looming and pervasive desire to privatize DFIs.

Compatibility with national development objectives.

Rigorous requirements of International Accounting Reporting Standards.

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Governance & Ownership Appointment of Directors - Skills base Vs. Expectations

◦ Quite often the appointing authorities will give you Board Members who will not necessarily enhance your skills base requirement yet you are expected to perform.

◦ Even where you get the right skill base -remuneration of the Directors is also a challenge as it is not competitive which reduces level of interest and commitment.

Support from Shareholders

◦ Getting the necessary support from your Shareholders is not always guaranteed.

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Operating Environment ◦ Increased Competition – Wide choices for clientele

Post Global Financial Crisis precipitated encroachment

of Commercial Banks in Development Finance.

Standard Bank Quick Loan Scheme by Standard Bank.

◦ Climate Change

Agribusiness – key to development.

◦ Management Information Systems Demands

Not in anyway different from private sector.

Innovative solutions to improve efficiency.

◦ Human Capital

Competition for skills – competitive remuneration.

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HEIGHTENED REGULATION

Post global financial crisis there is a heightened alert in the regulation of financial institutions – certainly is the case in Swaziland.

DFIs will soon be regulated by the Financial Services Regulator

Regional Integration

DFIs have in various forums been called

upon to push the agenda of regional

integration and cross boarder financing

cross border financing (FIP).

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Conclusions The need to share information and global

best practices becomes critical.

Resource mobilization is one of the greatest challenges faced by CEOs

Getting the right human capital skills is increasingly becoming a challenge owing to non commensurate reward schemes.

Crowding in of the commercial players in the development space presenting new challenges.

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