E Book on Reform and Balanced Scorecard - PowerPoint by exw42679

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									 KHULA ENTERPRISE FINANCE LTD

  LAND REFORM EMPOWERMENT
           FACILITY

PRESENTATION TO THE AGRICULTURE
   & LAND AFFAIRS’ PORTFOLIO
          COMMITTEE

   Presenters: Sandile Luthuli & George Mothoa
               Date: 18 March 2005




                                                 1
           Background & Introduction

 DLA’s research conducted in 1998

 Partnership approach with the PRIVATE SECTOR in facilitating
  the establishment of VIABLE land reform projects

 Wholesale revolving funding facility to provide highly
  concessionary (flexible repayment terms, lower transaction
  costs and reduced cost of capital) loans

 Sources of capital:
    Department of Land Affairs (R117m)
    European Union (R27m)
    Danish Development Agency (R1.7m)
    Department of Environmental Affairs & Tourism (R20m)


                                                                 2
         Programmes Implemented

Broad-Based Black Economic
 Empowerment Act

Financial Sector Charter

AgriBEE Charter (development stage)

Tourism Charter (development stage)


                                       3
               Market Offering
 Product Types:
    Mortgage Loans
    Equity Share Schemes
 Target Sectors
    Primary & Secondary Agriculture
    Eco-Tourism
 Target Market
    Workers from previously disadvantaged
     backgrounds
    Neighboring communities
 Balanced Scorecard Approach


                                             4
           Black Economic Empowerment
              Scorecard Components
(a) Direct Empowerment                           Weighting Score (1 - 100)
    Ownership (shares) and control                    20%                0
    Participation in Decision Making [Average]        20%                0
    Aggregate Weighting & Score                       40%                0
(b) HR Development Plan & Employment Equity
    Skills Development & Learnerships                22.5%              0
    Gender Equity                                    22.5%              0
    Aggregate Weighting & Score                        45%              0
(c) Staff Welfare
    Minimum Wage Legislation                            5%              0
    Aggregate Weighting & Score                         5%              0
(d) Residual (including indirect empowerment)
    Enterprise Development, rural development           5%              0
    Procurement, job creation                           5%              0
    Aggregate Weighting & Score                        10%              0
Aggregate Score (Weighted Average)                    100%              0


                                                                             5
                Performance Since Inception

Millions
              120                                                     107

              100

              80
Investments




              60
                                                  30        30
              40
                    21
                                        15
                              10
              20

               0
                    M




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                                                                      To
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                                                                        ta
                        -0




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                                                                          l
                          1




                                    2




                                              3




                                                        4




                                                                  5           6
             Jobs and New
          Shareholders Created
            PDI SHAREHOLDERS CREATED                 JOBS CREATED/MAINTAINED        TOTAL
          MALE          FEMALE         TOTAL           MALE          FEMALE         JOBS
2000/01           53             35            88             172             114       286
2001/02           57             75            132             71             83        154
2002/03          104             184           288            201             326       527
2003/04          491             283           774            551             350       901
2004/05          577             455       1032               592             472      1064
TOTAL            1282        1032          2314               1587        1345         2932




                                                                                            7
              Beneficiaries
       (Shareholders/Jobs Created)
  Female
1,345 (46%)




                                    Male
                                 1,587 (54%)




                                           8
                       Financial Review
Khula Enterprise Finance Ltd.
                                 Actual       Actual      Full Year
                                                           Budget
                                  Mar          Feb          Mar
                                  2004         2005         2006

Total Income                      4,555,706   3,970,986     5,832,857

Total Staff Costs                 1,180,973   1,170,628     1,433,965

Overheads                          230,830      202,661      725,232

Net Operating Income/(Loss)       3,143,903   2,597,697     3,673,661

Net Investment Interest Income   13,230,245   8,490,920     5,188,074

Net Income/(Loss) for the year   14,873,710   9,241,117     8,861,735



                                                                      9
       Portfolio Committee’s Concerns

 Skewed provincial spread

 Equity share schemes vis-à-vis Mortgage
  projects

 Beneficiaries’ capacity building and skills
  development




                                                10
              Provincial Spread
              Actual Investments
 60%




 50%




 40%




 30%




 20%




 10%




  0%
         EC   FS   GP   KZN   LP   MP   NC   NW   WC
Mar-04   1%   0%   0%   23%   6%   9%   0%   4%   57%
Mar-05   8%   0%   0%   28%   4%   6%   3%   4%   47%




                                                        11
      Equity Share vis-à-vis
       Mortgage Schemes


            70%       64%
80%
70%
60%                                                  36%
50%                                            30%
40%
30%
20%
10%
 0%
       Equity Share                   Mortgage Scheme

                       31-Mar-04   31-Mar-05




                                                           12
               Capacity Building –
               Skills Development

 Currently conducting skills gap survey on projects

 Partnership intervention approach.

    Primary Agriculture Education and Training
    Authority (PAETA)
    Comprehensive Agricultural Support Programme
    (CASP)
    Small Enterprise Development Agency (SEDA)


                                                       13
         Strategic View – Way Forward

 Provincial budget allocations

 Organisational partnership approach

 Closer relationship with Provincial DLA offices (LRAD)

 Corporate partners e.g. TSB

 RECAPITALISATION

 Co-ordinated and structured capacity building approach

                                                     14
Projected Impact – Provincial Spread
 60%




 50%




 40%




 30%




 20%




 10%




  0%
         EC    FS   GP   KZN   LP   MP   NC    NW    WC

Mar-04   1%    0%   0%   23%   6%   9%   0%    4%    57%
Mar-05   8%    0%   0%   28%   4%   6%   3%    4%    47%
Mar-06   9%    5%   1%   22%   7%   8%   7%    8%    33%
Mar-07   10%   9%   2%   17%   9%   9%   10%   11%   23%
Mar-08   10%   9%   2%   17%   9%   9%   10%   11%   23%




                                                           15
             Challenges Faced
 Fund complements LRAD grants
   – Pace of LRAD processes affects effectiveness
 Land Claims
   – Potential claims stall commitment by intermediaries
 Limited budget
   – Can only invest R37m per annum
   – Recapitalisation will allow R49m per annum & faster change in
     investment profile
 Reliance on intermediaries
   – Profile of LREF book mirrors intermediaries appetite for
     investments in specific area / province


                                                                16
THANK YOU



QUESTIONS

            17

								
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