South African Micro-finance Apex FundSouth African Micro-finance Apex Fund sasamafmaf

ANNUAL REPORTANNUAL REPORT

2011/122011/12

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Presentation OutlinePresentation OutlineMandate, Vision, Mission, Values & Objectives

Operating Model

2011/2012 Performance Highlights

samaf National Footprint

2011/12 Financial Performance

Auditor General Report

Way forward

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MandateMandatesamaf’s mandate is to create work opportunities and sustainable livelihoods through the facilitation and provision of affordable access to finance to micro, small and survivalist businesses for the purpose of growing their income and asset bases. It is also required to act as a catalyst in the development of a vibrant micro-finance industry in South Africa. The primary purpose is:

To facilitate the provision of affordable access to finance by micro and survivalist

businesses;

To extend financial and non-financial services to reach deeper and broader into the

rural areas, informal settlement and peri-urban settlement of South Africa;

To contribute towards the reduction of poverty and unemployment;

To build a strong, effective and efficient wholesale (Apex) Fund;

To contribute to better quality of life; and

To contribute towards a sustainable and vibrant micro financial industry in South

Africa.

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Vision & MissionVision & MissionMission

“To be a leader in developmental micro finance” (in South Africa)

To provide developmental finance and non-financial services to financial intermediaries through:

Mobilization of financial intermediaries

Wholesaling of funds

Development of institutional capacity

Lobbying and advocacy towards policy development

Development of valuable partnerships (between government , businesses and communities)

Vision

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Values & ObjectivesValues & Objectives1. Contribution to poverty alleviation goals through; Funding Intermediaries( Enterprise loans and poverty

alleviation loans) Capacitating Financial Intermediaries Regulation and Prudential Standards2. Exceed our stake holder expectation through;

Improving outreach through expanded satellite network / offices

Improving internal turnaround standards3. 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

ObjectivesValuesIntegrity: Dealing with staff and stakeholders in an

honest and ethical manner.

Transparency – ensuring compliance with best

practice on the dissemination and sharing of

information with all stakeholders and consulting

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.

High Performance: excellent performance and

satisfied customers that guarantee long term

sustainability of the South African Micro-Finance

Apex Fund.

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samaf Operating Modelsamaf Operating Model

IT

FIN

SC

HR

FI’s

SAMAF

Internal Audit

ExternalInternal

CB

EducationSelectionResearch

Primary / CoreSupport

MARKET

External

EDD

REG

PR & COMS

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Disbursements of R58.3m were made to FI’s in respect of loans and grants.

14 Micro Finance Institutions, 23 Financial Services Cooperatives and 24 stokvels were

supported.The total number of borrowers increased by 53% from 40 726 to 62 459.

68% of loans by the FI to end users were in rural communities and 93%

were micro-enterprise loans.

The number of end user savings increased by 15 % from 31 129 to 35 719

Installment repayments by FIs average 95%

272 individuals from 68 institutions nationally participated in capacity building

workshops.

samaf received an unqualified audit report

2011/12 Performance Highlights2011/12 Performance Highlights

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Approved Funding (R’m)Approved Funding (R’m)

An increase of 21% as compared to the previous financial year was achieved

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Total Disbursements (R’m)Total Disbursements (R’m)

Capacity building decreased

by 32% as compared to the

previous financial year

On lending funds increased

by 104% as compared to

the previous financial year

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On- lending per Province (R)On- lending per Province (R)

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Provinces On-lendingEC R2,500,000NC R 0WC R 5,000,000MP R 1,812,500NW R 2,095,000LP R 22,450,000GP R 5,686,340FS R 0KZN R 6,099,168

Capacity Building per province (R)Capacity Building per province (R)

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Provinces Capacity Building

EC R1,126,488

NC R 0

WC R3,348,665

MP R862,500

NW R1,940,000

LIM R1,642,001

GP R 450,070

FS R 0

KZN R3,298,443

samaf NATIONAL FOOTPRINTsamaf NATIONAL FOOTPRINTM=4F=4

M=0F=4

M=0F=3

M=1F=6

M=0F=5

M=2F=6

M=3F=3

M=2F=1

M=3F=5

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M= Micro Finance Institutions

F= Financial Services Co-operatives

2010/11 Financial Performance2010/11 Financial PerformanceStatement of Comprehensive Income

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2011/12 Financial Performance2011/12 Financial Performance

Expenditure

2011/12 2010/11

Compensation 26,324,706 30,568,885

Goods & Services 15,461,323 17,085,896

Total Operating Expenditure 41,786,029 47,654,781

Grants paid 12,668,167 18,388,755

Loans written off 3,693,745 1,047,923

Less: Reversal of Impairment (1,896,240) (8,727,675)

Total Expenditure 56,251,701 58,363,784

Operating expenditure

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Administration expenses (R’m)Administration expenses (R’m)

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Impairments as a % of FinancingImpairments as a % of Financing

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Assets for the last 5 years (R’m)Assets for the last 5 years (R’m)

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Auditor General ReportAuditor General ReportOPINION

An unqualified opinion was expressed, however issues were raised as part of emphasis of

matter.

EMPHASIS OF MATTER

Going concern

The Economic Development Department is re-organising its small lending business

institutions by merging samaf, Khula and small business activities of the Industrial

Development Corporation (IDC).

Material write-off and Impairments

Material losses to the amount of R 3 693 745 were incurred as a result of the write off of

loans provided to financial intermediaries.

In addition, material impairments to the amount R 2 899 287 were incurred on loans

provided to Financial Intermediaries.18

Auditor General Report (cont…)Auditor General Report (cont…)

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REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

Usefulness of information

Predetermined objectives

The reported performance information was deficient in respect of the following criterion:

Measurability : Indicators are not well defined.

Reliability of information

The reported performance information was deficient in respect of the following criterion:

Accuracy: the amounts , numbers and other data relating to actual performance have

not been recorded and reported appropriately.

Completeness: All actual results and events that should have been recorded have not

been included in the reported performance information.

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• As of the 1st of April 2012, Khula was merged with the South African Micro Finance Apex

fund (samaf) as well as the business operations of the Industrial Development

Corporation’s (IDC) small business funding portfolio.

• The new entity is called the Small Enterprise Finance Agency (sefa).

Way ForwardWay Forward

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THANK YOU

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