Business Plan 1009

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					VANTAGE FINANCIAL SERVICES GROUP             Business Case




           Private Placement Memorandum
                       September 2010




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VANTAGE FINANCIAL SERVICES GROUP                                                        Business Case

DISTRIBUTION RESTRICTION:

This document is being submitted to you on the understanding that the contents of this document
will not be divulged to any third party without the express written consent of the Management of
Vantage Financial Services (Private) Limited (“Vantage Financial Services” or “the Group”),
Vantage Money & Payment Systems (Private) Limited (“Vantage Money”) and SmartPayment
Solutions (Private) Limited (“SmartPay”). It is also understood that the Management of the Group
will not divulge any confidential information about you to any third parties that it may have access
to during the ongoing discussions.

This document shall remain the property of the Group and Management reserves the right to
request the return of any and all materials in this document.

This document will contain statements about the Group's projected future results that constitute
forward-looking financial statements. Any forward-looking financial statements represent only the
Group's views as of the time of preparing this document, based on current expectations in light of
the current economic environment. While we may choose to update forward-looking financial
statements in the future, we specifically disclaim any duty to do so; therefore these forward-looking
financial statements should not be relied upon as representing the Group's views as of any later
date. Forward-looking financial statements and projections are inherently subject to significant
economic, political and other uncertainties and contingencies which are beyond the control of the
Group.

We caution that such statements are not guarantees of future performance. Actual results may
differ materially from those expressed or implied in the forward-looking financial statements.




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VANTAGE FINANCIAL SERVICES GROUP                              Business Case
VANTAGE FINANCIAL SERVICES GROUP CORPORATE INFORMATION




1.   Vantage Financial Services (Private) Limited
     49 Central Avenue,
     Harare, Zimbabwe
     Telephone:    +263 4 2915 856
     E-mail:       finance@vantfin.co.zw
     Website:      www.vantfin.co.zw

2.   Vantage Money & Payment Systems (Private) Limited
     49 Central Avenue,
     Harare, Zimbabwe
     Telephone:    +263 4 2915 856
     Fax:          +263 4 2915 856
     E-mail:       money@vantfin.co.zw
     Website:      www.vantfin.co.zw

3.   SmartPayment Solutions (Private) Limited
     49 Central Avenue,
     Harare, Zimbabwe
     Telephone:    +263 4 2915 856
     Fax:          +263 4 2915 856
     E-mail:       info@smartpay.co.zw
     Website:      www.smartpay.co.zw

4.   Auditors
     To be appointed once the company is fully operational.




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VANTAGE FINANCIAL SERVICES GROUP                  Business Case


5.   Underwriting Bankers




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VANTAGE FINANCIAL SERVICES GROUP                     Business Case


TRANSACTION ADVISORS

1.   Business Consultants
     Exodus & Company Advisory
     Number 7 Dungarvan Close
     Borrowdale
     Harare, Zimbabwe
     Telephone:   +263 4 852659-61
     Fax:         +263 4 870882
     E-mail:      info@exodusandcompany.com

2.   Four Cubits
     6 Castell Court
     Samora Machel Avenue
     Harare, Zimbabwe
     Telephone:     +263 913 022 673
                    +263 913 732 437
     E-mail:        fourcubits@gmail.com

3.   Legal Advisors

     Mutumbwa, Mugabe & Partners
     151 Kwame Nkrumah Avenue
     Harare, Zimbabwe
     Telephone: +263 4 791 442
     Fax:       +263 4 790 525




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Vantage Financial Services Group                           Private Placement Memorandum

TABLE OF CONTENTS

       SECTION                                                                        PAGE

       DEFINITIONS                                                                         3
1.     EXECUTIVE SUMMARY
        6
1.1    The Opportunity
        7
1.2    The Proposed Solution                                                               9
1.3    Purpose of the Offer                                                               14
1.4    Use of the Offer Proceeds
       16
1.5    Financial Highlights                                                               18
1.6    Management and Staff                                                               24
1.7    Operational Strategy                                                               24
1.8    Exit Strategy                                                                      31
2.     ABOUT THE Vantage Financial Services                                     32
2.1    Background                                                                         32
2.2.   Current Operations                                                                 32
2.3    Planned Strategy
       32
3.     OVERVIEW OF THE VANTAGE FINANCIAL SERVICES GROUP
       34
3.1    Purpose
       33
3.2    Our Vision                                                                         33
3.3    Our Mission and Core Values                                                        33
3.4    Vantage Money & Payment Systems (Private) Limited                                  35
3.5    Smartpayment Solutions (Private) Limited
       35
3.6    Net1 UEPS Technologies Incorporated                                                35
4.     BOARD AND MANAGEMENT
       42
4.1    Members of the Board                                                               43
4.2    Directors and Senior Management Profiles
       43




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Vantage Financial Services Group                        Private Placement Memorandum

4.3   Net1 Project Team                                                                49
4.4   Corporate Governance                                                             51
4.5   Board Committees                                                                 52
4.6   Strategic Objectives                                                             52
5.    INDUSTRY ANALYSIS                                                                53
5.1   Market Size                                                                      54
5.2   Key Trends                                                                       56
5.3   Customers and Competition                                                        57
5.4   Multiple Industries                                                              57
5.5   Customer Identification/Definition
      61
6.    COMPETITIVE ANALYSIS
      62
6.1   The Competition (Direct and Indirect)                                            63
6.2   Competitor SWOT Analysis                                                         64
6.3   Competitive Advantages
      65
6.4   Strategic Options
      65
7.    MARKETING PLAN                                                                   66
7.1   Products and Services                                                            67
7.2   Branding Strategies                                                              73
7.3   Promotions                                                                       75
7.4   Pricing Strategy                                                                 75
7.5   Delivery Channels                                                                76
7.6   Customer Retention                                                               76
7.7   Marketing Plan Implementation                                                    76
8.    OPERATIONS PLAN                                                                  79
8.1   Short Term Plans
      79
8.2   Strategic Plans                                                                  80
8.3   Operational Risk Management Strategy                                             81
9.    BUSINESS MANAGEMENT                                                              85
9.1   Key Team Members                                                                 85




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Vantage Financial Services Group                           Private Placement Memorandum

9.2    Board and Management Team Gaps                                                     85
9.3    Group Board Members' Appointments                                                  86
10.    FINANCIAL PLAN                                                                     87
10.1   Bases and Assumptions                                                              87
10.2   Detailed Revenue Streams
       88
10.3   Pro-forma Financial Statements                                                     89
10.4   Directors' Responsibility Statement
       90
11.    LEGAL AND STATUTORY PROVISIONS
       92
11.1   Constituent Documents                                                              92
11.2   Agreements and Other Documents
       94
11.3   Pending Litigation
       94
12.    APPENDICES                                                                         95
12.1   5 Year Financial Projections                                                       95
12.2   Potential Clients' Support Letters
       95
12.3   Regulatory Authority Approval and Support Letters
       95




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Vantage Financial Services Group                              Private Placement Memorandum

DEFINITIONS
In this Offer Document, unless otherwise stated, the words in the first column shall have the meaning
stated opposite them in the second column and cognate expressions shall bear corresponding
meanings. Words purporting to be masculine include the feminine and vice versa and words
purporting to be singular include the plural and vice versa. Words purporting persons include
natural as well as corporations and associations of persons.

                                           Members of society who enjoy the benefits and
“Banked persons”                           facilities of traditional banking.


“CAPEX”                                    Capital expenditure

                                           Business entity(ies) duly registered under the
“Company” or “Companies”                   Companies Act (Chapter 24:03) of the Republic of
                                           Zimbabwe (as Amended).

                                           The Companies Act (Chapter 24:03) of The Republic
“Companies Act”                            of Zimbabwe (as Amended).

                                           Members of the respective Boards of Directors of
“Directors”                                Vantage Financial Services Group and its
                                           subsidiaries.

“Government”                               The Government of the Republic of Zimbabwe.


“ICT”                                      Information and Communication Technology.

                                           Net1 Universal Electronic Payments Systems
                                           Technologies Incorporated, a technology company
“Net1”                                     with a primary listing on the NASDAQ and a
                                           secondary listing on the Johannesburg Securities
                                           Exchange (JSE).

                                           A RBZ functional unit that regulates the operations
“NPS”                                      of the National Payment Systems of Zimbabwe.

                                           The offer of either ordinary equity participation or
                                           provision of a term loan facility or both to the
“Offer”                                    Group or any of its subsidiaries, in terms of this
                                           Offer Document dated May 2010.

“Ordinary Meeting”, “Annual General        An Ordinary or Annual or Extraordinary General
Meeting”, “Extraordinary General           Meeting of the shareholders of Vantage Financial




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Vantage Financial Services Group                       Private Placement Memorandum

Meeting”, “AGM” or “EGM”             Services (Private) Limited duly called           and
                                     constituted or any adjournment thereof.

                                     The ordinary shares of nominal United States of
“Ordinary shares” or “shares”        America dollars (US$) 1 par value in the share
                                     capital of the company.

                                     The fully paid up shares in the company and shall
                                     include payments made in cash, shares, services,
“Paid up share capital”              assets, goods, chores in action or any other form of
                                     consideration.

                                     A Smart Card Point of Sale Terminal operated by a
“POS”                                merchant to process payments for goods and
                                     services.

“RBZ” or “Central Bank”              The Reserve Bank of Zimbabwe.

                                     Registered beneficiary owners of fully Paid Up
“Shareholders”                       shares of US$1 nominal value.

                                     Certificate(s) in physical form relating to ordinary
“Share Certificate(s)”               share entitlements.

                                     The respective registers of members of Vantage
“Share Register”                     Financial Services and its subsidiaries in respect of
                                     the ordinary shares held in physical form.

                                     A computer chip-based card capable of sending,
“Smart Card”                         receiving, processing and storing data.

                                     SmartPayment Switching Solutions (Private)
                                     Limited, a wholly owned smartcard issuance,
“SmartPay Switch” or “the Company”   management, switching and settlements subsidiary
                                     of Vantage Financial Services a registered company
                                     in the Republic of Zimbabwe.

                                     A Special Resolution of the directors or
“Special Resolution”                 Shareholders of the company having the meaning
                                     attached thereto by Statutes.

                                     A SmartPay Switch issued smart card product
“Vantage Banking Card”               brand name owned by Vantage Money.




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Vantage Financial Services Group                          Private Placement Memorandum

                                        Vantage Financial Services (Private) Limited, a
                                        financial services holding company whose current
“Vantage Financial Services Group”      subsidiaries are comprised of two companies
 or “The Group”                         registered in Zimbabwe namely Vantage Money &
                                        Payment      Systems     (Private) Limited  and
                                        SmartPayment Solutions (Private) Limited.

                                        Companies wholly owned by the Vantage Financial
“Subsidiary” or “Subsidiaries”          Services Group.

                                        Vantage Financial Services (Private) Limited, a
                                        financial services holding company whose current
“The Group” or “Vantage Financial       subsidiaries are comprised of two companies
Services ”                              registered in Zimbabwe namely Vantage Money &
                                        Payment      Systems     (Private) Limited  and
                                        SmartPayment Solutions (Private) Limited.

                                        The capital raising proposals inclusive of the
“Transaction”                           Business Plan and Financial Projections forming
                                        part of the Offer Document.

                                        Companies and Individuals that participated in the
“Transaction Advisors”                  development of the Transaction, provided guidance
                                        or reviewed the Transaction.

                                        A Net1 proprietary smartcard based funds transfer
“UEPS”                                  software system known as Universal Electronic
                                        Payment System/

                                        Members of society who do not or are not eligible to
“Un-banked”                             hold traditional banking accounts.

                                        Members of society enjoying limited banking
“Under-banked”                          facilities from traditional banking.

                                        United States of America dollar, the lawful currency
“US$” “USD” or “United States           of the United States of America which is equal to
 dollars”                               one hundred United States of America cents.

                                        Vantage Financial Services (Private) Limited,
“Vantage Financial Services (Private)   financial services holding company registered in the
Limited”                                Republic of Zimbabwe.

“Vantage Money and Payment Systems      “Vantage Money and Payment Systems (Private)




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Vantage Financial Services Group                        Private Placement Memorandum

(Private) Limited”                    Limited”, a company registered in the Republic of
                                      Zimbabwe.

                                      Vantage Financial Services (Private) Limited,
“Vantage Financial Services Private   financial services holding company registered in the
Limited”                              Republic of Zimbabwe.




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Vantage Financial Services Group                            Private Placement Memorandum



1.    EXECUTIVE SUMMARY

      Vantage Financial Services (Private) Limited, is a registered company in accordance with the
      laws of the Republic of Zimbabwe. Its operations focus on the development of regulated
      innovative financial solutions targeted mainly at the unbanked and under-banked sectors of
      the economy.

      Vantage Financial Services (Private) Limited is the holding company of two Strategic Business
      Units that have been set up to operate a Smart Card Management and Switching System -
      (“SmartPay Switch”) and issue the Vantage Smart Banking Card - (“Vantage Money”).

      The promoters of the Group are seeking to raise US$5,000,000 (five million United States
      dollars) for the purpose of setting up and operating financial services group that will
      introduce banking to the previously unbanked population of the nation of Zimbabwe.

      1.1    The Opportunity

             Over the last seven to eight years, Zimbabwe has suffered from a declining economy
             that saw high inflation rates that beat world records being recorded. Attempts by the
             Reserve Bank and local commercial banks to encourage payments through use of
             credit and debit cards failed as a result of the poor and deteriorating
             telecommunications infrastructure that is reliant on physical telephone lines and
             outdated technology.

             In response to this situation, from February 2009, the country adopted the use of
             multiple currencies, mainly the United States dollar (“USD”), South African Rand
             (“ZAR”) and Botswana Pula (“BWP”) as its official currencies in place of the
             Zimbabwe Dollar.

             To complement this strategy, the Reserve Bank and the Ministry of Finance authorities
             also removed foreign exchange control restrictions and launched the Short Term
             Emergency Rescue Programme (STERP) that seeks to stabilise the economy within the




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Vantage Financial Services Group                             Private Placement Memorandum

             next two years. These developments have opened up opportunities for foreign direct
             investment inflows for new projects and infrastructure development.

             The introduction of foreign currencies to replace the Zimbabwe dollar, whilst
             welcome, has brought with it other challenges that include the unavailability of the
             currency notes and coins as well as change, leading to overcharging by retailers and
             service providers.

             Due to the challenges of the past and the recent changes in the economy there are
             relatively few individuals operating current and savings accounts at the traditional
             banks. The majority of transactions by individuals and in some cases corporates are
             now conducted in cash outside the traditional banking system. Where individuals use
             bank accounts these are mainly for receiving salary deposits which in most cases are
             withdrawn in full, in cash soon after deposit. This in turn has the effect of creating
             liquidity challenges for banks, due to the starving of the banking system of customer
             deposits thereby reducing their ability to engage in productive medium to long term
             lending, which have the potential to boost economic activity. In addition, the current
             trend has the added complication of requiring banks to hold huge volumes of bank
             notes at specific times of the month to cater for high volumes of withdrawals, due to
             the non utilisation of electronic methods of payment.

             These challenges and developments have presented an opportunity for the Group to
             provide technology that allows banking and payment transactions to be effected
             without the use of notes and coins, without relying on online communications while
             opening up the banking system to the wider populace of the country who until now
             have been excluded from traditional banking services of the „brick and mortar‟ which
             are not accessible to outlying areas. This technology also has the potential to increase
             the period in which deposits remain in the banking system hence improving the
             national banking system‟s deposit base and in turn its lending capacity to industry and
             commerce.




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Vantage Financial Services Group                            Private Placement Memorandum

             Vantage Money‟s Smart Card “Vantage” account allows the use of money gradually.
             Due to the current depressed economy, the informal sector has become the “formal
             sector” offering attractive opportunities for the Group‟s Smart Card technology based
             banking product. Most of the “unemployed persons” closed or had their bank
             accounts closed at the time of their leaving formal employment and yet they remain
             economically active and now handle significant transactions outside the traditional
             banking system. With their complex and stringent application processes, most banks
             will not open accounts for some of these people yet they handle more money than
             those in formal employment, who can easily open bank accounts. It is important to
             note that Vantage Money will ensure that KYC requirements are upheld, through use
             of its biometric technology. This technology brings easy and user friendly banking to
             the people on a smart card without relying on communication technology or
             traditional banks having to put up the expensive brick and mortar branches.

             The Group has identified and entered into several agreements with a South African
             based technology company Net1 Universal Electronic Payments Systems (UEPS)
             Technologies (http://www.net1ueps.co.za/) to provide the banking services and
             payment solutions through smart card technology.




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Vantage Financial Services Group                           Private Placement Memorandum

             In South Africa Smart Banking is for ALL


             .




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Vantage Financial Services Group                             Private Placement Memorandum




      1.2    The Proposed Solution

             Through Net1 UEPS Technologies‟ integrated Switching, Settlement, Clearing and
             Smart Card Payment System that has rapidly been acquired by central banks and
             commercial banks worldwide, the Vantage Financial Services Group believes it has the
             ultimate solution to provide a secure and reliable banking solution for both the formal
             and informal sectors of the economy while at the same time complementing the use of
             currency notes and coins to make payments.




      Using biometrics (fingerprint identification) and executing transactions offline, the UEPS
      technology provides a solution enabling a common platform for all electronic payments, as
      well as broadening the scope for branchless banking across the country.




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Vantage Financial Services Group                             Private Placement Memorandum




             As illustrated above, the UEPS system makes use of smart card technology that allows
             the issuing of Smart Cards that incorporate a “purse” and a “portable” interest earning
             savings account whilst facilitating payment for goods and services through the use of
             the Smart Banking Card.

             The UEPS System offers the following key features which are extremely important if
             used to tap into all market segments:

                Proven and tested state of the art security protocols. Important to note that the
                 security of the system is not dependant on the POS hardware infrastructure or
                 back-end host system. The security occurs between the two smart cards transacting
                 with each other.
                Biometric fingerprint technology is used as the method of identification
                 throughout the entire system. This technology is more suitable for the young, aged
                 and illiterate who would normally have difficulty working with Personal Identity
                 Number (“PIN”) based cards.




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Vantage Financial Services Group                               Private Placement Memorandum

                Multiple audit trails are maintained to ensure that every transaction will succeed,
                 since it can work on and off line, unlike most POS systems in operation currently
                 in the country.
                Offline and online transaction processing to enable all clients to open a smart card
                 bank account and transact anywhere, anytime in the urban, semi-urban, rural and
                 deep rural environments of Zimbabwe.
                An affordable range of banking products and services offered through one smart
                 card which becomes the physical BANK ACCOUNT under-written by financial
                 institutions including effecting the following:

                    Salary and wage payments solution - (for employers and related
                     organizations).
                    Pension and social grant payments
                    Cash deposits
                    Cash withdrawals
                    Balance enquiries - (directly from POS terminals through use of the card).
                    Transaction lists (directly from POS terminals through use of the card).
                    Transaction reversals and where necessary, refunds.
                    Deposits to Smart Card accounts without card
                    Funds transfers (from a primary account to a savings account and vice-versa as
                     well as from a POS Terminal through the use of the card)
                    Money transfers between the following: smart card to smart card; smart card
                     and another bank account; and smart card to cash collection by non-smart card
                     holders.
                    Third party bill payments to registered, linked and once-off payments made
                     on POS Terminals through use of the smart card.
                    Cash advances can be made to salary and wage earners that are calculated
                     using parameters set by the financial institutions with respect to finance
                     charges and percentages allowed as an “advance payment” on their
                     salary/wages.




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Vantage Financial Services Group                                Private Placement Memorandum

                      Transport and other ticketing systems - payment for bus fares and other
                       services.
               A retail banking application that enables tellers and merchants to acquire cash
                   deposit transactions and load value onto cardholder smart cards.
               A unique fee module which allows for the smart cards and back-end system to
                   collect the applicable fees due and distribute these to the parties sharing in the
                   revenue i.e. issuer, acquirer, POS facilitator (being the merchant performing the
                   transaction).
               An offline settlement system (using a “milking card”) - a powerful tool enabling all
                   merchants and financial services companies situated in deep rural areas to
                   participate in the system without the need for network connectivity.

              The following benefits will accrue to Zimbabwe:

                       1.     The introduction of a banking system that facilitates the inclusion of the
                              poor in the mobilisation of savings deposits.

                       2.     The system makes it possible for traditional banking to be provided to
                              the previously unbanked using technology instead of relying on the
                              expensive brick and mortar investments.

       The following are some of the benefits to be derived from use of the SmartPay Switch Smart
       Card banking technology:

      The system will allow Vantage Money and other financial institutions to securely tap into an
       „untouched‟ market to get all the currently unbanked money banked on the smart cards (with
       the physical funds held in a single Trust Account underwritten by a commercial bank),
       allowing the banks to re-invest these monies and grant affordable loans to small and medium
       size businesses (micro-lending) and thereby raising the economy of the country as a whole.

      Injection into the banking system of new deposits that is unaccounted for today.
      Reduction of fraud, when people beat the current banking systems because of connectivity
       problems.
      Reduction in theft/robberies from merchants, banks and individuals as the system reduces
       the need to stock or carry physical bank notes and coins.




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Vantage Financial Services Group                                 Private Placement Memorandum

      Reduction in the rate of wear and tear to bank notes, in the economy.
      Reduction in the introduction and the use of fake notes in the system.
      Reduction in the demand for cash on pay days thereby avoiding intermittent cash shortages
       during salary season.
      Increasing the period during which cash deposits remain in the banking system.
      A secure method of monitoring and distributing money remittances across the country.
      Ability to provide for detailed transaction and other reports.

              1.2.1   Strategic Partner’s key business objectives

                      Net1 UEPS Technologies Incorporated of South Africa (“Net1”) is a technology
                      company with a primary listing on the NASDAQ (NASDAQ: UEPS) and a
                      secondary listing on the Johannesburg Securities Exchange (JSE). Net1‟s
                      strategy for its global expansion of smart card based banking and payment
                      system is:

                         to implement the UEPS Switching, Settlement and Smart Card System in
                          most emerging economies

                         to identify in the select markets local partners that add value and can bring
                          a large card base to the Switch as well as infrastructure and outlets in
                          urban, semi-rural and rural areas
                         to achieve inter-operability between countries and become the de-facto
                          standard for secure smart card solutions
                         to transfer skills and create job opportunities for the local citizens
                         to enhance the lifestyles of the poor by offering a transacting tool that
                          grants them access to a wide range of affordable financial services




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Vantage Financial Services Group                             Private Placement Memorandum




      Despite its premium pricing when compared to other bank card management systems, the
      Net1 UEPS‟s exceptional array of value adding services and products still offer more value for
      money. Following on market research, no other system in the world has been identified as
      offering similar services.




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Vantage Financial Services Group                                Private Placement Memorandum



1.3   Financing proposal

      In this financing proposal, the promoters of Vantage have taken into consideration that
      Vantage is at its infancy but the targeted sector is a high growth sector with significant upside
      potential due to the factors indicated above on the technological front. In addition,
      consideration has also been put on the company‟s business model, the proposed technical
      partnership with NET1 and the projected cash flows. The promoters propose that the required
      US$5 million be raised in the form of ordinary equity financing.

      The promoters have US$2 million in their consortium, Vantage Holdings which is made up of
      Vantage Capital and a Consortium of Municipalities. Vantage Holdings makes up 40% of
      Vantage Financial Services. The requirement to meet in order to get the US$2 million from
      NSSA which is also 40%; is that a strategic shareholder commits to the 20% equity available
      for US$1 million.

      Shareholding Structure Before Private Placement

                                           Vantage Holdings (Pvt.) Ltd.

                                   Consortium of Promoters and Consortium of
                                                 Municipalities
                                            100%



                                      Vantage Financial Services (Pvt.) Ltd




                                    100%                            100%



           Vantage Money & Payment Systems                       SmartPayment Solutions
                      (Pvt.) Ltd                                       (Pvt.) Ltd




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Vantage Financial Services Group                        Private Placement Memorandum

Shareholding Structure After Private Placement




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Vantage Financial Services Group                              Private Placement Memorandum

      The promoters are offering 20% of the Company for a consideration of US$ 1 million in cash.
      This helps the consortium meet the conditions set out by other investors and the technology
      providers NET1.



1.4    Purpose of the offer

      The purpose of the offer is to raise US$1 000 000 (one million United States Dollars) through
      equity financing to go towards covering the following costs:

             the cost of acquiring the SmartPay Switch & Card Management System, Smart Card
              POS Terminals, developing and issuing the Vantage Money Smart Banking Card - the
              “Vantage Banking Card.” and working capital of US$2 000 000 (two million United
              States Dollars).

             Software from NET1 will cost US$3 000 000 (three million United States Dollars),

1.5   Operational stucture of the group entities

       Vantage Financial Services Group has two subsidiaries (SBUs) which will operate as follows:

              1.5.1   Vantage Money & Payment Systems (Private) Limited

                      Vantage Money & Payment Systems (Private) Limited (“Vantage Money”) will
                      use smart card technology to provide a banking service for the unbanked and
                      under-banked through the “Vantage” Smart Banking Card.

                      Vantage Money was originally set up to use mobile technology to provide
                      banking services to the unbanked and under-banked. However, upon the
                      identification of the superior nature of the technology from Net1 Universal
                      Electronic Payments Systems (UEPS) technology in delivering smartcard based
                      banking services to a wider range of Zimbabweans, the mobile banking
                      strategy was shelved in preference to smartcard based banking, as illustrated
                      below.

                      The following products will initially be available on the Vantage Smart
                      Banking Card, whilst the other products and services available as illustrated on
                      the next page will be added on in due course:

                         The primary account that bears interest to be used for ordinary
                              payments and purchases;
                         Money transfer services;




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Vantage Financial Services Group                             Private Placement Memorandum

                       Account balance and statement enquiry (view or print);
                       Bill payments;
                       Cash advance facility for wage/salary/pension earners; and
                       Cash back facility at SmartPay Switch POS Terminals in retail shops.

                    Below is an illustration of the full range of financial and non-financial products
                    and services which in future will become available on the UEPS. Initially the
                    SmartPay Switch will offer the Banking, Money Transfer and Payments
                    modules with biometric identification methodology.




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Vantage Financial Services Group                             Private Placement Memorandum




             1.5.2   Smart Payment Switching Solutions (Private) Limited

                     Smart Payment Switching Solutions (Private) Limited (“SmartPay Switch”) was
                     recently incorporated to establish the SmartPay Switch that aims to provide a
                     national smart card management, switching and settlement solution.

                     To this end, the SmartPay Switching services will also be made available to all
                     interested commercial banks and other financial institutions in Zimbabwe,
                     upon the payment of a membership fee.

                     Joining the SmartPay Switch will enable these institutions to issue their own
                     brand of smart cards on the SmartPay Switch card management system.
                     SmartPay Switch‟s revenue model is therefore critically dependant on the
                     volume of cards in circulation.




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Vantage Financial Services Group                                          Private Placement Memorandum

The business model for the SmartPay Switch operations is as illustrated below:
SMARTPAY SWITCH BUSINESS MODEL


   VANTAGE FINANCIAL SERVICES
              GROUP                                                                           NET 1 UEPS
                                                      SHAREHOLDER
                                                                                            TECHNOLOGIES

         SHAREHOLDER
                             Other Shareholders                                                     Licensing
                                                                                                    Agreements




    VANTAGE MONEY
                                   Issue smartcard
                                                         Service Level
                                                          Agreement



    Agency Underwriter
    Agreement
                             NEW Cardholders                                   SmartPay Switch
          /                                                                                            Service Level
                                    Issue smartcard                         Issue POS Terminal          Agreement

          CFX Bank Limited
                                                          New Merchants
                                                                                      CFX Bank asSettlement Bank-
              Other FI s       Service Level Agreements                                  -PAYS Service Providers




As illustrated above the SmartPay Switch operations would be underwritten by CFX Bank Limited
and its services would in due course be available to financial institutions (FIs) promoting the concept
of the Smart Card and branchless banking.




                                                      P a g e | 23
Vantage Financial Services Group                               Private Placement Memorandum



      1.6    Use of the Offer Proceeds

             The US$5 000 000 (five million United States Dollars) being sought under this private
             placement offer would be deployed into the two SBUs.

             1.6.1   SmartPay Switch
              Capital or cost item:                                                        Amount ($)
              TOTAL                                                                           4 000 000

             1.6.1.1 An upfront amount of approximately US$3 million is required to set up the SmartPay
                     Switch in Zimbabwe, install 1000 Smart Card POS Terminals and operate for 12
                     months.

             1.6.2   Vantage Money
              Capital or cost item:                                                        Amount ($)
              TOTAL                                                                           1 000 000

               1.6.2.1 Initially approximately US$1000 000 is required to set up the Vantage Card Centre,
                       issue 300 000 Smart Cards and operate for 12 months.

             Additional information:

             a) In order to ensure the success of the marketing and sales strategies, a combined
                sum of US$1 million will be set aside to cover product promotions and education
                programmes. These will focus on the advantages on the use of smart cards as well
                as the benefits of making regular savings through smart card banking. This
                amount of money continues to come from shareholders.

             b) A sum of 2% of the funding requirements has been set aside to meet advisory and
                related legal costs of the offer.

             c) None core assets such as motor vehicles will be procured on need basis in support
                of the Vantage card and SmartPay Switch sales strategies and the nationwide POS
                Terminal implementation plans.




                                            P a g e | 24
Vantage Financial Services Group                                  Private Placement Memorandum

              1.6.3   Facility drawdown

                      Facility drawdown for working capital will be effected in tranches periodically
                      to cover requirements for the ensuing quarter.

                      Drawdown for capital expenditure would be made against production of pro-
                      forma invoices pre-approved by the executive management team, and in cases
                      when their approval limits are exceeded, the Board.




                      A Biometric Smart Card POS Terminal to be used in Zimbabwe

1.7   Financial Highlights

              Below are highlights of the five year financial projections that presume financing being
              secured by a combination of debt and equity financing. The highlights are in the form
              of analysis of income from operations, operating profit and cash flow analysis. In
              addition to the highlights below are projections of demand levels of Smart cards and
              POS machines.




      1.7.2   SmartPay Switch




                                              P a g e | 25
Vantage Financial Services Group                        Private Placement Memorandum

      Smartpay Income Trend




             Smartpay Net Profit Trend




                                         P a g e | 26
Vantage Financial Services Group                                 Private Placement Memorandum



The penetration rate during the initial five years is projected at an average rate of 200 smart cards per
POS Terminal.
1.8    Operational Strategy
                The Vantage Money and Vantage Smart (Banking) Card brands will be marketed to
                represent the future of inclusive financial services in Zimbabwe. To this end, the
                brand positioning will reflect a new way of banking targeted at the un-banked and
                under-banked population comprised of amongst others the current clients or
                previous clients of traditional banks who have lost faith in the banking system.

                These prospective clients are in the majority and have been failed by traditional
                banks. The offer for the first time in Zimbabwe of a bank account in your pocket
                through the use of the Vantage Money Smart Card will appeal to them as confirmed
                during our road shows.

                1.8.1   Marketing strategy

                        Based on market research and responses to our presentations to target
                        sectors, our offer to the prospective clients will be a Smart Card Banking
                        Account that offers a payment service at retailers and other providers of
                        services whilst earning interest on depositor balances.

                        In addition, to the normally banked individuals and employers, other target
                        sector profiles will include:

                              Individuals not in formal employment but are engaged in economic
                               activity by way of running informal, small and medium sized
                               businesses. (According to public media sources, this group currently
                               accounts for the majority of the economically active population of the
                               country).




                                                P a g e | 27
Vantage Financial Services Group                              Private Placement Memorandum

                         In rural areas, these people are trading in agricultural commodities
                          and facilitating the supply of agricultural inputs and produce. They
                          include the small-holder farmers.

                         In mining communities, these people are engaged as third or fourth
                          tier suppliers of some of the raw materials and services required by
                          the mining communities.

                         In the urban areas, most of the economically active population is
                          engaged in informal trading, where they source goods which are
                          scarce on the formal market for re-sale. There are also a significant
                          number of people involved in small scale manufacturing of various
                          consumer goods and these are sold typically to the end consumer or
                          are produced on behalf of some of the established manufacturers.

                         The target market is currently not banked, primarily arising from the
                          stringent „previous banking record‟ requirements by the conventional
                          banks for account opening, and who also face challenges arising from
                          the current cash shortages prevailing on the market as a result of the
                          use of foreign multiple-currencies.

                         Our proposed solution will fulfil the needs of these sectors by way of
                          allowing the various economic players to trade without the need to
                          source for cash. The smart card also provides them with a transaction
                          history, which increases their ability to obtain finance facilities to
                          grow their businesses further as well as access loan facilities in future.

                         Non Governmental Organisations (NGOs) will also be able to
                          distribute aid and food to the poor, the rural and marginalised people
                          using this system.

                    From the above, it is clear that the Vantage smart card product and the
                    SmartPay Switch System will be a conduit of real economic and financial




                                          P a g e | 28
Vantage Financial Services Group                             Private Placement Memorandum

                     empowerment of both the marginalised unbanked and underbanked sections
                     our Society.




             1.8.2   Strategic alliances

                     In order to ensure an effective and rapid market reach, the operational
                     strategy shall be guided by the need to have strategic alliances with
                     institutions that have a countrywide presence. To this end, municipalities,
                     Zimpost, supermarkets, public utilitiy providers, pension funds and related
                     entities will be enlisted to facilitate card issuance, deposit taking and card
                     acceptance. The whole business would be underwritten by an authorised
                     bank.



             1.8.3   Operational structure

                     Ultimately the Vantage Money and SmartPay Switch business operations will
                     be conducted from separate premises with SmartPay Switch managing the
                     Card Management and Switching System and deployment of Smart Card
                     POS Terminals whilst Vantage Money will drive the Vantage Banking Card
                     client recruitment and card issuance. This arrangement will be implemented
                     in order to avoid a conflict of interest in the use of the SmartPay Switch
                     services if new investors such as commercial banks decide to invest into the
                     Switch.

                     The diagram below seeks to highlight the operational partners and
                     transactions that would take place in an offline and online communication
                     environment.




                                             P a g e | 29
Vantage Financial Services Group                                  Private Placement Memorandum




                      1.8.3.1 Participants to the process flows




1.8.3.2 Participants to the transaction process flow
                                 The diagram below seeks to highlight the roles and the participants to
                                 the Smart Card issuance process as well as depositing, transacting and
                                 merchant payment arrangements.




                                               P a g e | 30
Vantage Financial Services Group                              Private Placement Memorandum




                    7                                            1




                                                     2



                                       6
        7                                                                3

                        5          7                      7


                                       7


                                               4




   KEY:

             =      Transaction Process Flow

             =      Funds/Deposits

             =      Report Provision




                                           P a g e | 31
Vantage Financial Services Group                             Private Placement Memorandum


             The following major transactions are illustrated above:

             1.     Card Issuer

                    The Issuer, i.e., Vantage Money, Bank or Financial Institution is the
                    organisation that processes applications and provides a smart card to their
                    customer through their branches and agency networks. The Issuer is
                    responsibility for transactions that are put through on cards that they have
                    issued and will be responsible together with the Underwriting and Settlement
                    Banks for debiting funds from the relevant Trust Account.

             2.     Cardholder (Customer)

                    This relates to a person who has opened a Smart Card Banking Account with
                    Vantage Money or any financial institution and to whom a smart card has been
                    issued.

                    In order to commence using their Smart Card to make payments, the Smart
                    Card holders need to deposit funds into their Smart Card Banking Accounts
                    through a designated Agent or Bank in cash or through salary/wage, pension
                    or money transfer.

             3.     Retailer/Merchant

                    The Retailer is the organisation providing the cardholder with goods or
                    services (this can be a retail outlet such as a supermarket, a service provider or
                    other organisation selling products or services such as a transport operator).

                    The Retailer sends the details of a card transaction to their Acquirer/SmartPay
                    Switch who will process it and send the transaction record on to the relevant
                    Trust Account/Settlement Bank for payment.

             4.     Acquirer/Merchant Acquirer (SmartPay Switch)

                    An Acquirer, and in this case, SmartPay Switch is the organisation that is
                    retained by a Retailer or merchant to process payment card transactions on
                    their behalf. Acquirers are responsible for receiving the details of card




                                           P a g e | 32
Vantage Financial Services Group                             Private Placement Memorandum

                    transactions from the Retailer process and pass them through to the Trust
                    Account holding underwriting Bank or Settlements Bank for payment.

             5.     Bank (XYZ Bank)

                    The Bank is the financial institution that manages and controls the movement
                    of financial transactions over the Trust Account into which all Smart Card
                    banking funds are held. If it is designated as a Settlement Bank its role would
                    include settlement and payment of card transactions. The Underwriting and
                    Settlement Banks are responsible for processing card transaction details from
                    the Acquirer and for passing payment to the Retailer.

             6.     Funds/Deposits

                    The Bank is responsible for receiving and controlling smart card banking
                    deposits and for making payments to the Retailers from funds held in the Trust
                    Account.

             7.     Report Provision

                    Reports are generated and provided to facilitate reconciliations as follows:

                              Retailer to Smart Card holder in the form of a balance enquiry, mini
                               statement or payment transaction receipt.

                              SmartPay Switch to Retailer in the form of card transaction reports.

                              SmartPay Switch to Card Issuer in the form of new accounts opened
                               and card transaction settlement and payment reports.

                              Bank to SmartPay Switch in the form of bank statements, reports of
                               funds received plus card transaction settlement and payment
                               reports.

                              Bank to Card Issuer in the form of bank statements.



             In summary, the Vantage Financial Services Group seeks to:




                                           P a g e | 33
Vantage Financial Services Group                              Private Placement Memorandum

                   Provide Smart Card based banking services to the currently unbanked and
                    under-banked.

                   Potential customers will apply for and get their Vantage Banking Cards
                    enrolled at Merchants and other mobile retail points and at other agency
                    facilities in alliances with Zimpost, municipalities, Rural Councils, retail stores
                    and schools as well as other relevant distribution channels.




                                           P a g e | 34
Vantage Financial Services Group                                     Private Placement Memorandum

1.9   Exit Strategy


      The Vantage Financial Services Group would seek a listing on the Zimbabwe Stock Exchange
      within five years of commencing operations. In addition, we foresee financial institutions
      seeking to invest in the SmartPay business as they see the business model develop. This will
      also provide an exit mechanism for short-term to medium-term investors.




             A Biometric Smart Card POS Terminal in use at a site in South Africa




                                                P a g e | 35
Vantage Financial Services Group                               Private Placement Memorandum

2.    PLANNED IMPLEMENTATION STRATEGY

      2.1    Planned Strategy

             The operational strategy for Vantage Financial Services sees emphasis being placed on
             growing the Vantage Financial Services Group‟s Smartpayment Solutions (Private)
             Limited (“SmartPay Switch”) and Vantage Money & Payment Systems (Private)
             Limited (“Vantage Money”)‟s smartcard based banking businesses.

             To achieve the projected growth Vantage Financial Services will be inviting new
             investors to participate through loan or equity financing directly into the Vantage
             Financial Services Group operating companies. In future, Vantage Money services will
             be expanded in Zimbabwe to include provision of micro-finance services as well as
             Money Transfer Agency services on the back of smart card technology. It is also
             envisaged that services will initially be offered within Zimbabwe and subsequently
             within the region.

             Following on the successful launch of the Vantage Banking Card services in
             Zimbabwe, Vantage Money would enter into technical service agreements with select
             banks initially in the Southern Africa Development Community (SADC) countries that
             already have the UEPS Smart Card Switch such as Malawi, Botswana, Namibia and
             Zambia.

             Using the skills and experiences gained in Zimbabwe, the aim will be to roll out our
             model of the Vantage Smart Card services to the un-banked and under-banked with
             the related banking business underwritten by a local strategic partner bank. We
             believe that this strategy will reap huge benefits for all stakeholders.




                                            P a g e | 36
Vantage Financial Services Group                                      Private Placement Memorandum




             Cardholder Identity Verification through Biometrics in South Africa




                                                P a g e | 37
Vantage Financial Services Group                            Private Placement Memorandum



3.    OVERVIEW OF THE VANTAGE FINANCIAL SERVICES GROUP

      The core business of the The Group is comprised of the newly incorporated Vantage Money
      and SmartPay Switch SBUs.

      The two SBUs have entered into a strategic relationship with Net1 UEPS Technologies
      Incorporated of South Africa to provide a national level banking solution with smart card
      accounts management and transactions switching capabilities that will be underwritten by a
      selected bank.




      3.1    Purpose

             Vantage Financial Services (Private) Limited is the holding company of Vantage
             Money & Payment Systems (Private) Limited and Smartpayment Swithcing Solutions
             (Private) Limited.

      3.2    Our Vision

             To be the preferred partner in the provision of convenient solutions to the financial
             needs of the, until now, un-banked and under-banked while creating value for all
             stakeholders.

      3.3    Our Mission and Values

             To facilitate financial inclusion by developing and providing convenient, simple,
             affordable and secure solutions to meet the everyday banking and payment system
             needs of the previously un-banked and under-banked utilising superior smartcard
             based technologies.




                                          P a g e | 38
Vantage Financial Services Group                             Private Placement Memorandum



             Our Core Values

                   Dependable

                   Integrity

                   Professionalism

                   Quality Driven

                   Respectful

                   Responsiveness

                   Team Spirit

      3.4    Vantage Money & Payment Systems (Private) Limited

             Vantage Money & Payment Systems (Private) Limited (“Vantage Money”) was
             established to provide a banking and payment solution for the unbanked and under-
             banked through the use of the Vantage Smart Banking Card.

      3.5    Smartpayment Switching Solutions (Private) Limited

             Smartpayment Solutions (Private) Limited (“SmartPay Switch”) was incorporated to
             facilitate the acquisition, installation and operation of the SmartPay Switch from Net1
             UEPS Technologies Incorporated of South Africa (“Net1”). SmartPay Switch aims to be
             the national smart card management, switching and settlement solution. To this end,
             the SmartPay Switch services will also be made available to Zimbabwean commercial
             banks and other financial institutions upon payment of a membership fee.




                                          P a g e | 39
Vantage Financial Services Group                                 Private Placement Memorandum

      4      STRATEGIC         TECHNICAL         PARTNER:         NET1   UEPS    TECHNOLOGIES
             INCORPORATED

             Net1 UEPS Technologies Incorporated (“Net1”) is a technology company with a
             primary listing on the NASDAQ (NASDAQ: UEPS) and a secondary listing on the
             Johannesburg Securities Exchange (JSE). Net1 UEPS‟s website is available at:
             http://www.net1ueps.com

             As at 31 March 2009 Net1‟s financial position was as follows:

             Total assets                           -       US$423million
             Net income for the nine months         -       US$68m (US$65m FYE 30/06/08)
             Earnings per share                     -       US$1.21 (US$1.14 FYE 30/06/08)

             Net1 has not taken up equity in the Vantage Financial Services Group. Its
             involvement in the partnership will therefore be limited to the provision and after
             sales support of the UEPS software solution.

             In 1989, Net1 patented the methodology that describes a method through which funds
             can be transferred from one smart card to another in a secure and offline manner. The
             patents are known as the FTS Patents (Funds Transfer System) and current patent
             registrations are as follows:

                   South African Patent No. 90/7106

                   Botswana Patent No. P810

                   Swaziland No. RP/45/1992

                   Namibia No. 92/0091

                   United States Patent No. 36/788

             The patents are held by Net1 Applied Technologies South Africa Limited, a wholly
             owned South African subsidiary of the Net 1 UEPS Technologies, Incorporated. Today,
             Net1 is a world leading provider of smart card technologies and systems that create a
             secure and affordable transacting channel between formal businesses and the “under-
             banked” and “un-banked” populations of developing countries          who have no or
             limited access to traditional banking facilities.




                                             P a g e | 40
Vantage Financial Services Group                              Private Placement Memorandum

             During 1989, Net1 realised the need to develop an alternative banking solution that
             would meet the “real” needs of the un-banked people world wide. Using the patented
             FTS methodology, Net1 designed and developed the world‟s first commercial
             electronic wallet – the UEPS (Universal Electronic Payment System), using the most
             advanced form of smart card technology.

             The primary purpose of the UEPS was to deliver an alternate method of banking that
             would allow financial institutions to provide a wide range of services to all citizens
             regardless of their financial position.

             Net1 believes that it is the first company worldwide to implement a system that can
             enable the billions of people who generally have limited or no access to a bank account
             to affordably conduct electronic transactions with each other, financial institutions,
             government agencies, employers, retail merchants and other financial service
             providers.



             KEY FEATURES OF THE UEPS

             The UEPS technology includes functionality that allows the following:-

             Identification, Authentication, Non-Repudiation & Affirmation of UEPS Transactions

             A fundamental element of the UEPS is that all payment and money transfer
             transactions take place between two UEPS smart cards – the smart card to be debited
             and the smart card to be credited. During the transfer of value between the two smart
             cards, the transaction is written to a dedicated history file on each of the smart cards.
             These history files are subsequently used to ensure settlement either directly or
             through the activation of the UEPS multiple streams audit trail feature. Thus, smart
             card holders can reconcile their monthly accounts directly from the smart card‟s
             transaction history file.

             Continuous Debit

             The continuous debit feature of the UEPS eliminates the need for customers to buy
             pre-paid units by allowing them to use their smart cards to pay for these services as




                                            P a g e | 41
Vantage Financial Services Group                              Private Placement Memorandum

             and when they need and use them. All a customer needs to do is to insert his smart
             card into the utility equipment and the smart card will debit itself whenever a unit of
             service is used.

             Multiple and Restricted Wallets

             The multiple wallet feature allows card holders to use their smart cards to help
             manage their budgets. Up to 255 wallets can be configured and activated per card
             holder depending on the electrically erasable programmable read-only memory, or
             EEPROM, available on the particular smart card. Each of the wallets can be configured
             to meet the specific requirements of the card holder, and can be used for interest-
             generating savings, pre-paid utilities, medication management, credit, debit orders
             and for many other purposes.

             Offline Loading

             The offline loading feature has been designed to solve the problems associated with
             reliance on limited infrastructures and allows value to be distributed through existing
             infrastructures such as the postal service, fixed line telephones, cellular phones, verbal
             communication and newspapers.

             Biometric Identification

             As an alternative form of customer identification, the UEPS supports biometrics in the
             form of fingerprint recognition. Biometric scanners are used to record a customer‟s
             fingerprint images. The fingerprint templates that result are stored in the holder‟s
             smart card and used for identification whenever the smart card is used.

             Automatic Credit

             The automatic credit feature was developed to allow smart card holders to receive
             regular, fixed amount payments at POS devices that may not have the capability to
             perform online functions

             Interest on Card




                                            P a g e | 42
Vantage Financial Services Group                             Private Placement Memorandum

             The UEPS was designed, in essence, to be an alternative to a formal banking account
             that allows a smart card holder to earn interest on the value contained in his various
             wallets. The ability to earn interest provides an incentive for people to maintain
             balances on their smart cards rather than convert the full balances to cash or to unload
             them to a traditional banking account where they would not earn any interest.

             UEPS Morphing

             The UEPS is designed in such a way so that it can inter-operate with other standard
             payment systems such as EMV, one of the more widely-used standards in the banking
             sector. In the future, smart card holders may wish to use their smart cards in
             environments that are currently enabled for other smart card-based payment systems.
             The UEPS morphing feature allows its smart cards to transact at EMV POS devices as
             if our smart cards were in fact EMV smart cards.

             Automatic Debit

             The automatic debit feature was created to allow a smart card to reduce the balance in
             any of its active wallets on a specific date and for a predetermined amount. This
             function can take place in an offline environment at any POS device.

             The automatic debit feature reduces the risks associated with collection of insurance
             premiums and other regularly scheduled payments by ensuring that any funds loaded
             to the smart card are first used to service the automatic debit before being transferred
             for the cardholder‟s general use.

             Multiple Streams Audit Trails for Offline UEPS Transactions

             The UEPS, as an offline system, must ensure that all transactions effected offline are
             settled, at some point in time, by the back-end system.

             Settlement is critical to guarantee that no funds can be lost by card holders even when
             a POS device, its paper audit trail or its merchant smart card is lost, stolen or
             destroyed. Importantly, smart card transactions, including automatic credits,




                                           P a g e | 43
Vantage Financial Services Group                             Private Placement Memorandum

             automatic debits, interest accruals, agent transfers, cash downloads and purchases, all
             have a financial effect on individual smart card balances and must therefore be settled
             in order to preserve system integrity. The UEPS multiple streams audit trail
             functionality is designed to ensure that the replacement smart card contains the correct
             amount of funds when a lost, stolen or defective card is replaced.

             Transparent and Automatic Recovery for Offline UEPS Transactions

             The UEPS is designed to recover failed transactions through its transparent and
             automatic recovery feature. This feature is activated during the session key
             establishment phase that occurs whenever two smart cards transact. During the
             session key establishment phase, each smart card generates an eight-byte natural
             random number and triple-DES encrypts it with its generic UEPS key pair. These two
             encrypted blocks are then exchanged by the two smart cards, and once decrypted,
             used by each smart card to generate a random DES key pair. This new key pair is used
             to exchange further information between the smart cards until the transaction is
             completed. During the next phase, each smart card passes to the other its smart card
             unique serial number and its current transaction counter.

             Apart from requiring minimal infrastructure, other key features of the UEPS payment
             system that address the un-banked and under-banked populations‟ needs include:

             AFFORDABILITY - as most of the transaction costs are borne by the organisations
             that make use of the channel and there are minimal monthly fixed fees payable;

             SECURITY - since the card serves as a substitute for cash, but provides loss tolerance
             which protects the card holder in the event of loss or stolen cards; and

             SIMPLICITY - as a biometric fingerprint identification system is used by the
             cardholder to access the value and perform transactions.

             EFFICIENCY – paperless banking anywhere and everywhere.

             RELIABILITY – offline payments and purchase transactions.




                                           P a g e | 44
Vantage Financial Services Group                                                 Private Placement Memorandum

          Net1‟s Worldwide Presence




                                                                                 CONTRACTS
 CONTRACTS SIGNED               DISCUSSION PHASE                  FINAL
                                                                                 SIGNED AND          CONTRACT
 AND ACTIVITIES                 OR CONTRACTS                      NEGOTIATI
                                                                                 ACTIVITIES          S SIGNED
 COMMENCED                      SIGNED                            ONS
                                                                                 COMMENCED

 UEPS              VTU          UEPS              VTU             VTU            VTU MTN             VTU MTN

   South Africa    Columbia      Morocco        Indonesia      Vietnam         South Africa    Rwanda
   Malawi                         Philippines    United Arab    Mozambique      Nigeria         Ivory Coast
   Namibia                        Zambia          Republic                        Cameroon
   Botswana                       Zimbabwe                                        Swaziland
   Nigeria                        Angola
   Ghana                          Kenya
   Iraq                           Egypt
                                   Uganda
                                   Tanzania
                                   Swaziland
                                   Lesotho


          Key:
           UEPS             -          Smart Card products on the Universal Electronic Payments System

           VTU/MTN          -          Airtime Virtual Top-Ups (VTU) with MTN or other Cellphone
                            Networks



          Net1's technology has been implemented across the world, for instance in South Africa where
          it has over 5 million customers; Ghana, Iraq, Namibia, Botswana, Nigeria, Malawi, the
          Russian Federation, Uzbekistan, Oman, Ukraine, Moldova, India, Mongolia, Vietnam and




                                                           P a g e | 45
Vantage Financial Services Group                                      Private Placement Memorandum

      Colombia all use the UEPS System. Africa contributes up to 70 percent of the group revenue
      but is growing at a 10 percent rate a year, while the rest of the world has been growing at a
      much faster rate of up to 200 percent.

      As part of Net1‟s disciplined approach to growing its presence globally, management
      evaluate and enter into Partnerships or Outsourcing Agreements where they can draw on
      local knowledge and infrastructure to drive the rapid adoption of its system. In Zimbabwe,
      Net1 awarded the country outsourcing license to the Vantage Financial Services Group as it
      was considered well positioned to drive the business concept across the country.

      In late August 2008, Net1 acquired 80.1% of BGS Smartcard System AG (“BGS”), an Austrian
      company, whose core business consists of developing and integrating smart card-based
      offline and online financial transaction systems. Since 1993, BGS has implemented tailor-made
      smart card-based payment solutions, focusing on emerging economies and in cooperation
      with banks, enterprises and government authorities. BGS is headquartered in Vienna, Austria,
      and has subsidiaries in India and Russia, and a branch office in the Ukraine. Distributors are
      located in Asia, Central and South America, the Commonwealth of Independent States and
      the Middle East.




      New Smart Cards being collected and others loaded with monetary value in Iraq




                                                 P a g e | 46
Vantage Financial Services Group                            Private Placement Memorandum

5.    BOARD AND MANAGEMENT

      The Organogram below seek to illustrate the initial management structures that will be
      enhanced as the businesses grow. As new institutional investors take up equity stakes in the
      SmartPay Switch, this operation‟s management will become independent from that of
      Vantage Money in order to ensure that there‟s no conflict of interest.


                                          BOARD




        INTERNAL
         AUDITOR


                                            GROUP CEO




                                                                        GROUP FINANCE &
          GROUP
                                                                        ADMIN EXECUTIVE
         MARKETING
         EXECUTIVE




                             GENERAL                             GENERAL
                            MANAGER                              MANAGER
                            SMARTPAY                          VANTAGE MONEY




                                          P a g e | 47
Vantage Financial Services Group                             Private Placement Memorandum

       5.1   Members of the Board of Directors

             The following Board Compositions are envisaged:

             a)      Vantage Financial Services

                     The Board of Directors of Vantage Financial Services will be made up of seven
                     directors, three of which will be non executive directors, including the
                     Chairman of the Board. Summary profiles of two of the four executive directors
                     are detailed in note 5.2.1 and 5.2.4 below. As indicated in note 9.1, the
                     remaining executive appointments will be made by 30 September 2010, in line
                     with the short term implementation plan.

             b)      Vantage Money & Payment Systems (Private) Limited

                     The Board of Directors of Vantage Money will be made up of three directors,
                     two of which will be non executive directors. A summary of the profile of the
                     executive director is detailed in note 5.2.2 below.

             c)      Smartpayment Switching Solutions (Private) Limited

                     The Board of Directors of SmartPay Switch will be made up of three directors,
                     two of which will be non executive directors. A summary of the profile of the
                     executive director is detailed in note 5.2.3 below.

             5.2     Executive Directors and Senior Management Profiles


             5.2.1   Mr Cassius Gambinga          -   Group Finance & Administration Executive
                     Cassius has wide ranging experience in the industrial and manufacturing sector
                     spanning over a period of 15 years. He served at PG Industries Limited as Head
                     of Finance and Accounting for 5 years. He was also a Finance Manager at
                     Turnall Holdings Limited and once worked at National Foods Limited as a
                     Financial Accountant. He then moved as a pioneer Finance Executive of Premier
                     Discount House in 2002 and led its subsequent conversion to merchant banking
                     in 2004.

                     Cassius‟ invaluable experience in the fields of accounting, financial reporting,
                     audit and industrial management, places him in the strategic role of guiding the
                     company‟s advisory arm.




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Vantage Financial Services Group                                    Private Placement Memorandum

                      Cassius is a member of the Institute of Chartered Accountants in Zimbabwe.

             5.2.2 Mr Cleopas Ngavi              -    General Manager - Vantage Money & Payment
                     Systems

                     Cleopas is a seasoned Sales Executive and has been the Senior Sales Executive at
                     The Zimbabwe Independent Newspaper since 2005. Cleopas has worked in the
                     sales field with organisations that include; Marketlink Communications and
                     APV Zimbabwe.

                     His previous achievements include:

                              Successfully assisted in the launch of Zimbabwe Independent products
                               i.e. Quoted Companies Magazine, Banks and Banking Magazine,
                               Insurance Survey Magazine, Asakheni (Corporate Social Investments
                               Awards).

                              Cleopas holds a Bachelor of Business Administration Degree and a
                               Diploma in Marketing from the Institute of Marketing Management as
                               well as a Certificate in Education from the University of Zimbabwe.

             5.2.3    Mr Jackson Kanhenga              -      General Manager - SmartPay Switch and
                      Merchant Services

                      Jackson has been the Group Operations Manager at Baines Imaging Group
                      where his duties included Strategic Management, Budgets and Operations and
                      Expenses analysis, Staff Management, Business Development and Corporate
                      Customer Relations Management. Before taking up this position he had also
                      held the positions of IT Manager and Systems Developer within the Group.

                      Before joining the Baines Group Jackson had also worked for Gennex Software
                      Systems as a Systems Developer. He has also worked on projects that include;
                      Web Centrix (Pvt) Ltd and a Smart card security systems development project
                      with Aduk Infosystems          i.e. (www.adukinfo.co.zw) Website Development
                      (www.webcentrix.co.zw, www.ideacapital.co.zw)

                     His previous achievements include successful project development of:

                              Online Medical Imaging for Radiology Imaging - System to allow
                               specialists in Australia and Canada to report on local patient cases




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Vantage Financial Services Group                              Private Placement Memorandum

                           MedAcc - Medical Accounting Program for Medical Claims management
                            integrated to Pastel Accounting

                     Jackson holds a Bachelor of Science in Information Technology Degree from the
                     University of Port Elizabeth as well as a Certificate in Financial Management
                     plus Entrepreneurship and Management Development Training

             5.2.4   Mr Progress Mambo       - Internal Audit and Compliance Executive
                     Progress worked as Director of Risk Management and Systems at Exodus &
                     Company (Private) Limited where he was involved in establishing and putting
                     in place all key operational risk management systems. Progress also worked
                     for Premier Finance Group Limited as its Chief Internal Auditor and later Chief
                     Risk & Compliance Office and developed Risk, Compliance and Corporate
                     Governance Policies and Frameworks in the group, including the
                     quantification of management risk appetite through set risk limits.

                     His skills and experiences include:

                           Establishing risk-based audit plans to set out the priorities of the
                            internal audit function, consistent with corporate objectives.
                           Conducting audits and producing reports for management and the
                            Board Audit Committee.
                           Providing a holistic opinion on the effectiveness and adequacy of risk
                            management, control, and governance processes in the Group.

                     During his mainly bank auditing career that commenced in the Reserve Bank
                     of Zimbabwe‟s where he rose to the position of Senior Bank Examiner, Progress
                     also worked for Agricultural Bank of Zimbabwe (AGRIBANK) as well as NMB
                     Bank Limited. Progress holds a Bachelor of Business Studies Degree as well as
                     an MBA from the University of Zimbabwe.




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Vantage Financial Services Group                            Private Placement Memorandum

      5.3    Corporate Governance

             The Directors of Vantage Financial Services Group and its subsidiaries acknowledge
             and uphold the seven basic tenets of good corporate governance as espoused in the
             King II Report on Corporate Governance, namely:-

                   Discipline

                   Transparency

                   Independence

                   Accountability

                   Responsibility

                   Fairness; and

                   Corporate Social Responsibility

             Although not directly regulated by the Central Bank, the Group will adopt the Reserve
             Bank of Zimbabwe‟s corporate governance guidelines and comply with the
             requirements set out therein. The Boards of the Vantage Financial Services Group
             companies will undertake their primary oversight function of setting the strategic
             direction for the Group, monitoring performance and ensuring compliance and
             conformance with statutory and regulatory requirements and retain full and effective
             control of the institutions at all times.

      5.4    Board Committees

             The following Board Committees review operational activities and provide guidance
             to Management:

             Audit Committee

             The main function of this committee will be to regularly review and assess the
             adequacy of the Company‟s systems of internal controls and the financial reporting
             and audit process. The committee will therefore seek to manage operational risk
             arising from internal and external fraud, systems failures and inadequate financial
             controls. The composition of this committee will be dominated by non-executive
             directors. The committee is set to meet quarterly. Currently, the audit committee will
             also be responsible for the group‟s risk management function, however the Board
             intends to separate the two committees once the Board is fully constituted with the
             required mix, in line with corporate governance principles which it ascribes to.




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Vantage Financial Services Group                               Private Placement Memorandum

             Remuneration Committee

             This committee will be charged with determining the remuneration of the Directors
             and Senior Management, approving policy guidelines for the company‟s yearly pay
             review and developing and retaining staff. The committee is set to meet half yearly.

             Executive Committee

             This committee is set up to determine the overall direction of the Company within
             parameters and policies set and approved by the Board. The committee is set to meet
             at least monthly.

      5.5    Strategic Objectives
             The key strategic objectives of this Business Plan are:-
             5.5.1   Provide new banking service for the previously unbanked and under-banked.

             5.5.2   Introduce “effective, inclusive plastic money” into Zimbabwe‟s national
                     payment system.

             5.5.3   Complement      current    traditional    banking   services   for   Zimbabwe‟s
                     development.

             5.5.4   Mobilise and bring cash from the informal sector into the formal banking
                     system in the form of savings deposits.

             5.5.5   Profitably establish the smart card in Zimbabwe to the benefit of all.




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Vantage Financial Services Group                                Private Placement Memorandum

6.    INDUSTRY ANALYSIS

      In the January 2010 Monetary Statement the Reserve Bank of Zimbabwe reported that as at 28
      January, 2010 there were 28 operating banking institutions comprised as follows:

       Type of Institution                                            Number Operational

       Commercial banks                                                         15
       Merchant banks                                                           6
       Finance houses                                                           0
       Discount houses                                                          3
       Building societies                                                       4
       Total                                                                    28
               (Source: Central Bank Monetary Policy Statement: January 2010)

      At that time there were also 17 licensed asset management companies and 75 operating
      microfinance institutions. Below is a table highlighting current statutory reserve requirements
      that although reduced, are still making it difficult for traditional banks to provide loans and
      advances in the foreign currencies that are now legal tender in place of the Zimbabwe Dollar.

                                                                                     New Levels (Forex)
       Commercial Banks and Merchant Banks
       Demand and Call                                                                             10%
       Savings accounts                                                                            10%
       Repos and buybacks                                                                          10%
       Discount Houses                                                                             10%
       Finance Houses                                                                               7%
       Building Societies                                                                         2,5%
               (Source: Central Bank Monetary Policy Statement: January 2010)




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Vantage Financial Services Group                             Private Placement Memorandum

      New Minimum Capital Requirements for Financial Institutions

      Due to the liquidity challenges, including capital constraints being encountered in the
      macroeconomic environment, commercial banks are unable to embark on any meaningful
      investments in technology. It is such opportunities abound that we believe it opportune to
      introduce smart card banking as the opportunity exists for the product to also appeal to the
      currently bankable population.

              Type of Institution                                 Minimum Capital Requirement
              Commercial Banks                                                    USD 12.5 million
              Merchant Banks                                                        USD 10 million
              Building Societies                                                    USD 10 million
              Finance Houses                                                       USD 7.5 million
              Discount Houses                                                      USD 7.5 million
              Asset Management Companies                                               USD 500 000
             (Source: Central Bank Monetary Policy Statement: January 2010)

      6.1    Market Size

             Despite the current low levels of business in general since the introduction of foreign
             currencies as legal tender in February 2009, the availability of disposable income,
             customer demands and expectations are expected to increase. One of the major
             positive developments in Zimbabwe is that there is now a greater willingness to use
             technology such as Cellphones, Internet, Automated Transaction Machines and
             Electronic Funds Transfer Point Of Sale (EFTPOS) terminals in retail outlets.




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Vantage Financial Services Group                              Private Placement Memorandum




      Below are some of the demographics that highlight the potential market size:

              Year:                                1982                1997          2008
              Population                           7.5m                12.2m         13.9m
              Children under 15 years              3.6m                5.8m          6.1m
              Economically active                  1.3m                1.6m          1.8M
              Formal sector Workforce              1.3m                1.5m          0.9m
              Communal farmers                     1.0m                1.2m          1.3m
              Informal Sector (Inc. Diaspora)      0.1m                1.2m          3.5m
              Unemployed                           0.2m                1.0m          1.9m
              Unemployment rate                        8%              40%           80%

             Area: 390,759 sq km (150,873 sq miles)

             Major language: English (official), Shona and Ndebele

             Major religions: Christianity, indigenous beliefs

             Life expectancy: 44 years (men), 43 years (women) (UN)

             Monetary unit: 1 Zimbabwe dollar = 100 cents (Currency suspended 2009)

             Main exports: Tobacco, cotton, tourism, agricultural products, gold, platinum
              gemstones




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Vantage Financial Services Group                                         Private Placement Memorandum

               GNI per capita: US $340 (World Bank)

                (Source: Central Statistical Office, 2009)




                Tourism – The Victoria Falls and Bridge



      6.2       Key Trends

                6.2.1    Technological Issues

                         Fixed telecommunication services have almost collapsed countrywide. While
                         mobile phone services have continued to expand. The new inclusive
                         government        has     two    dedicated   ministries,   Ministry   of   Information
                         Communication Technologies and Ministry of Science and Technology driving
                         the    turnaround       strategies   for this    sector. However, no       meaningful
                         developments have taken place to date as little funding has been coming into
                         Zimbabwe despite the partial implementation of the terms of the Government
                         of National Unit (“GNU”) that was established in February 2009.

                6.2.2    Political/Legal

                         The political climate is forecast to remain fairly stable ahead of the proposed
                         national elections in 2011 that are envisaged to be held under a peaceful
                         environment. However, the uncertainty associated with the coalition
                         government arrangement will continue to restrict the flow of Direct Foreign




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Vantage Financial Services Group                              Private Placement Memorandum

                    Investment into the country keeping formal employment levels down. The
                    following issues will continue to influence the political climate:

                          Finalisation of the GNU agreement issues
                          Eradication of corruption
                          Pace of turn-around of economic collapse
                          High unemployment and lack of disposable income
                          Currency notes availability
                          Possible labour unrest due to Trade Union impatience with slow pace of
                           change

                    It is also hoped that indigenisation policies will be speedily clarified and
                    resolved in order to give direction to the investing public both local and
                    foreign.

6.3   Customers and Competition


             Vantage Money‟s customers will be comprised of all economically active business and
             personal sectors. Competition will come from store cards and payment smart cards as
             well as the traditional banking products and bank cards.

             The major competitive advantage of the Vantage Smart card over all its current
             competitors in Zimbabwe is its ability to act as a bank account and earn interest. The
             table below serves to illustrate the customer segments as well as the Vantage Banking
             Card products that would be offered to serve their respective needs.




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Vantage Financial Services Group                            Private Placement Memorandum

  Vantage Banking Card       Vantage        Cash-         Local          Interest   Payments
         Sector:             Banking       Back at       Money           Earning:      and
                            Card Type:      POS:        Transfers:                  Purchases:
 1. Delta Beverages/       (B2B)
    Lobels/ Redan Fuels                                                             √
 2. Informal sector and    PERSONAL
    communal farmers                      √             √            √              √
    plus bank tail-end
    accounts
 3. Salaries and wages;    GOLD
    Grants and Pensions                   √             √            √              √
    NGOs, LGPF, NRZ,
    ZESA, and Pensions
    Office/NSSA
 4. ZIMRA/Toll Gates -     (B2B)
    (Duty and Toll Fees                                 √                           √
    Payments)
 5. Informal Sector        (B2B)
   SMEs, and Tuck-                                      √            √              √
   shop Owners
 6. Medical Aid Fund       GOLD
    Management –                          √             √            √              √
    Societies and
    Insurers)
 7. CARGILL/ COTTCO -      PERSONAL
    Gokwe/Sanyati/                        √             √            √              √*
    Muzarabani Areas

      6.4    Multiple Industries

             Both Vantage Money and the SmartPay Switch will deal with multiple industries.
             SmartPay Switch will issue, switch, settle and manage the database of all the smart
             cards issued by Financial Institutions (FI) that join SmartPay Switch as members or
             investors or both. SmartPay Switch will also sign-up and issue Smart Card POS
             Terminals to merchants and related parties for use in processing Smart Card based
             payments. Vantage Money will be one such FI and will issue the various types of
             Vantage Smart Banking Cards in competition with other FIs. Employers, Governments
             Ministries and Departments as well as NGOs will be marketed to facilitate the
             issuance of Vantage Smart Banking Cards to their Employees and beneficiaries.

             The following proposal was presented to one such strategic industry player, the
             Zimbabwe United Passenger Company (“ZUPCO”) to cater for its commuter business




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Vantage Financial Services Group                              Private Placement Memorandum

             as well as its Employees. This proposal will be implemented with ZUPCO upon
             approval by its Board of Directors.

             ZUPCO will be licensed as a SmartPay Switch Agent to issue new Vantage Smart
             Banking Cards and the complete processing cycle of the transaction will follow the
             following steps.

             Step 1: Signing Up and Setting Up ZUPCO Agency Offices.

             ZUPCO will be signed up as a Vantage Banking Card issuing and maintenance Agent.
             SmartPay Switch will pay for all the equipment to be used for processing new card
             applications and SmartPay Switch will supply the POS devices to be installed at the
             ZUPCO ticketing sites and buses but ZUPCO will pay a monthly rental at about 10%
             of the purchase price of each terminal plus a 0.50% merchant commission on the total
             value of each day‟s processed transactions. However, ZUPCO will have the option to
             pay for the purchase of the terminals with ongoing service support provided by
             SmartPay Switch officers.

             ZUPCO Agency Offices will be equipped with Registration, Enrolment and Smart
             Card Issuing workstations and appointed staff trained, enrolled as System Operators
             and issued with SmartPay Switch “Operator Cards” to register, enrol and issue
             Conductor/Agent Operating cards to select staff and Vantage Banking Cards to the
             commuters.

             Step 2: Registration, Enrolment and Vantage Banking Cards Issuing

             To commence the card issuing process the SmartPay Switch Operator Card will be
             inserted in the bottom slot of the dual smart card reader attached to the Registration,
             Enrolment and Smart Card Issuing workstation. A blank Vantage Banking Card will
             be inserted into the top of the dual smart card reader.

             During the Registration and Enrolment process the applicant‟s full static details i.e.
             names, form of Identification and biometric fingerprints will be captured. Information




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Vantage Financial Services Group                              Private Placement Memorandum

             captured for all enrolled commuters will be batched and uploaded periodically and at
             the end of each business day online to the SmartPay Switch System.

             Step 3: Registration of Bus Conductors/Agents to facilitate Ticket Sales

             The selected Bus Conductors/Agents will be enrolled/registered on the SmartPay
             Switch by the System Operators and issued with “Merchant” IDs and Cards.

             The Bus Conductor/Agent will be equipped with the following systems equipment
             necessary to perform the verification/identification of Vantage Banking Cardholders -
             POS Device (BIO 930) and Merchant Card.

             Step 4: Funding/Loading of Vantage Cards plus Ticket Sales to Card holders

             The funding/depositing of cash to facilitate the loading of value on the Vantage Smart
             Cards will be conducted through the SmartPay Switch Bank and other select Agents.

             To conduct a ticket sale, the Bus Conductor/Agent‟s Merchant smart card will be
             inserted into the bottom slot of the POS device and the commuter‟s card is to be
             inserted into the top slot of the smart card reader of the POS device.

             The Bus Conductor/Agent will select the relevant “ISSUE TICKET” option and enter
             the correct bus fare on the POS device.

             A slip will be printed to verify that the commuter has paid for the trip.

             Step 5: Banking - Periodically and at end of Business Day

             At say 10:00am and at end of Business Day the Bus Conductor/Agent will be required
             to bank the processed transactions via ONLINE Settlement to the SmartPay Switch.
             This will enable the SmartPay Switch to process the transactions and the on following
             day generate ZUPCO MIS Reports.




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         Vantage Financial Services Group                                          Private Placement Memorandum

                         Below is an illustration of the above 5 Step Process:



            SmartPay Switch                                        Commercial/
            Centre                                                 Settlements
             Card Issuance, POS             Online and
                                                                   Bank
              Device Installation,
                                              Off-line               Receive Card
              Card Customisation
                                                                      Deposits/Funding
              and Initialisation
                                             connection
                                                                     Payments to ZUPCO/
             Transaction
                                                                      Merchants at various
              Processing, Database
                                                                      Banks using RTGS
              management and
              Settlements                                            Deposits to own
                                                                      Customer Accounts
             Customer Call Centre
                         Step 4                                    Step 5             {END}

Online Banking by
ZUPCO Bus                                                                  ZUPCO/Merchant
Conductor at End                                                             Receive MIS Reports
of Day                                                                       Reconcile MIS
                                                                              Reports with Bank
                                                                              deposits

                         Step 3                           Step 2                         Step 1{START}


                 Bus
                 Conductor/Kiosk
                 Conductor processes Card                                                   Cardholders/
                  payment for ticket
                                                          Cardholder at
                                                          any POS                            Commuters
                 Value transfers from                                                        Consumers apply for
                  Vantage Card to Merchant                Device                               Vantage Smart cards at
                  Card                                                                         ZUPCO & Vantage
                                                           Vantage Cards                      Money Offices
                                                            loaded with value at
                                                            SmartPay Switch.                  Applicants receive their
                                                                                               Vantage Smart Cards.
                                                           POS Cardholders
                                                            ready to make                     Card holders make
                                                            Payments                           deposits into the
                                                                                               SmartPay Switch
                                                                                               Trust/Settlements
                                                                                               Account at the SmartPay
                                                                                               Switch Bank and Agents




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Vantage Financial Services Group                             Private Placement Memorandum

6.5    Customer Identification/Definition

The following identified customer segments will be targeted for the Vantage Banking Card and the
SmartPay Switch POS Terminalisation:

 TARGET MARKET                 TARGET MERCHANTS              TARGET SECTOR FOR
 SECTOR                        FOR SMARTPAY POS              VANTAGE BANKING CARD
                               TERMINAL

 1. Delta Beverages/ Lobels/   Delta Distribution/Lobels     Clients i.e. Bottle Stores, Retail
    Redan Fuels/ Innscor       & Redan Mobile Delivery       Shops and Tuck-shop Owners;
                               Vans/Drivers                  Recreation Clubs, Hotels, etc

 2. Informal Sector,           SPAR, TM, OK, Doctors,        Unbanked, under-banked plus
    Communal farmers and       FoodChain Group, Clinics,     existing and previous Savings bank
    bank tail-end accounts     ZIMRA, ZESA, Surgeries,       account holders within minimum
                               Hospitals, Pharmacies, City
                                                             account balance range
                               of Harare, Net One, etc
 3. Govt grants & pension      (As in 2 above)               Pensioners, Grants Recipients and
    funds, NGOs, LGPF, NRZ,                                  Employees
   ZESA, insurance
   companies/ NSSA and
   Mines
 4. ZIMRA/Toll Gates - (Duty   (As in 2 above)               All Custom Duty Payers and
    and fees payments)                                       Drivers (Individuals + Corporates)

 5. Informal Sector SMEs       Wholesalers - Mohammed        Individuals, SMEs, Cross-Border
                               Mussa, Jeggars, Red Star      Traders, Truckers, etc
                               and Bhaddela, ZIMRA-
                               Customs, Clearing Agents,
                               MTAs
 6. Medical Aid Fund           Doctors, Surgeries,           Medical Aid members
    Management - (Societies    Hospitals, Clinics,
    and Insurers)              Pharmacies, Medical Aid
                               Societies/Insurers
 7. Cargill/ Cottco -          Local Service Centre/         Small Scale Farmers and Cargill,
    Gokwe/Sanyati/             Growth Point Retailers,       Cottco Employees
    Muzarabani Areas           Beer-halls, Bottle Stores,
                               Farm & City Centres and
                               Farming input suppliers




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Vantage Financial Services Group                                Private Placement Memorandum


7.     COMPETITOR ANALYSIS
       As illustrated below, we believe that our product offering will be much more attractive
       compared to traditional products.

 FACTOR/             REQUIREMENTS AND              VANTAGE SMART CARD REQUIREMENTS
                     OR PAYMENT                    AND PAYMENT METHODS:
 TRANSACTION:        METHODS:

 Traditional Bank    You need to qualify to        Instant Bank Account or Virtual Banking. No
 Accounts            open a bank account.          account required for cardholder at the Bank.
                                                   Bank interface only through the one
                                                   Trust/Holding Account opened by SmartPay
                                                   Switch to cater for all Vantage Banking
                                                   Cardholders.

                     Cash, cheque, magnetic        Offline smart card based payments plus
 Method of           stripe cards (Online debit    electronic wallet.
 Payment
                     and credit) + Cash.

 Transaction         On-line =                     Both off-line and online = Versatile
 Verification        Communication
                     challenges

 Implementation      Extensive infrastructure      Limited reliance on telecommunications and
                     required. Electricity and     electricity infrastructure. Terminals can work
                     telecommunications            with cellular, GPRS and fixed line
                     (mostly fixed line)           communications infrastructure, equipment is
                     networks.                     mostly battery power driven.

 Infrastructure      Debit and Credit cards        Smart Cards can host 1 terminal per 1,000
 Cost                typically can host 1          cardholders.
                     terminal per 100
                     cardholders.

 Security            Magnetic stripe cards         Biometric (finger-printing) (mandatory) or PIN
                     and cheque instruments        driven (optional).
                     are vulnerable to fraud.
                                                   All transaction data is stored on the card
                     Transaction records           providing a very good audit and security trail of
                     stored on paper and kept      transactions. The rest of the data is ultimately
                     cardholder and




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Vantage Financial Services Group                             Private Placement Memorandum

                     merchant.                  stored at the Back end Host SmartPay Switch.


      7.1     The Competition (Direct and Indirect)

              Traditional Banks and Retail Chain Stores have been identified as offering potential
              challenges to the Vantage Banking Card. In addition the Zimswitch System could
              acquire smartcard technology and provide direct competition to SmartPay Switch
              especially since the traditional banks are members of Zimswitch. The following table
              seeks to identify existing and potential competition to the Vantage Banking card:

 INSTITUTION            MAIN STRATEGIES               KEY PRODUCTS/ SERVICES

                                 FINANCIAL INSTITUTIONS

 1. Central     Africa Extensive branch network;      Have been developing the Valuta Prepaid
    Building Society   Investment in technology;      Debit Card. They also offer Savings
                       Competitive       pricing,     Deposit Accounts, SWIFT transfers,
                       Highly trained staff and       EFTPOS. Debit Cards, Internet, telephone
                       Strong branding.               and Electronic Banking

 2. TN Bank             New Commercial        Bank TN Prepaid Smart Card plus Cheque and
                        currently with         few Savings Deposit Accounts, SWIFT transfers,
                        branches.                  EFTPOS. VISA Electron Debit Cards,
                                                   Internet, telephone and Electronic Banking.

 3. CBZ Bank Limited Extensive branch network;        They once issued and failed to market the
                     Investment in technology;        VISA Horizon Smart Card but may decide
                     Competitive pricing, Highly      to try again. Cheque and Savings Deposit
                     trained staff and strong         Accounts, SWIFT transfers, EFTPOS. VISA
                     branding.                        Electron Debit Cards, Internet, telephone
                                                      and Electronic Banking.

4. All   Traditional Extensive branch network; Cheque and Savings Deposit Accounts,
   Banks             Investment in technology; SWIFT transfers, EFTPOS. VISA Electron
                     Competitive       pricing, Debit Cards, Internet, telephone and
                     Highly trained staff and Electronic Banking.
                     Strong branding. Could
                     acquire the capital to
                     introduce Smart Cards.
                                  FUEL MERCHANTS




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Vantage Financial Services Group                                Private Placement Memorandum

1. Total Zimbabwe          Countrywide network of The Total Prepaid Card currently used for
                           forecourts and Service fuel purchases only. Could be developed
                           Stations.              for other payments and purchases.

                                         EXISTING SWITCH

    2. ZimSwitch           Membership        of      all Online switching and settlement of    POS
                           Commercial      Banks     in and ATM Card transactions
                           Zimbabwe


                7.1.1   Gap Analysis
                        The matrix on the above page clearly highlights the current superiority of the
                        Vantage Smart Banking Card as most the cards on offer are just pre-paid cards
                        that do not offer the Instant Bank Account that is currently only availed from
                        our Partners, Net1 UEPS.

      7.2       SWOT Analysis
                The SWOT analysis that follows further seeks to identify the areas that need to be
                watched whilst exploiting the opportunities currently available:
                Our Strengths
               We hold exclusive licensing for Zimbabwe from Net1 UEPS, including IT support
               Approved launch by the Reserve Bank of Zimbabwe
               Qualified and experienced group management team
               The system is user-friendly and compatible with all international banking systems.
               Access to ZUPCO‟s national ticketing infrastructure

                Weaknesses
               New business venture with unforeseen risks
               Limited experience and skills in smart card business operations
               Lack of adequate capitalisation
               Requirement to quickly recruit skilled staff
               Lack of opportunities for FDI at present


                Opportunities
               Countrywide potential customer base
               Address identified weaknesses – raise the required capital




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Vantage Financial Services Group                                  Private Placement Memorandum

               Become the pioneer for the introduction of smart cards in Zimbabwe
               Creation of symbiotic relationship with local communities
               Ability to harness and create capital for the country‟s growth

                Threats
               Effects of future need to adapt to changes to the National Payment Systems and the
                Banking Act and Regulations
               Failure to meet heightened customer expectations
               Delayed investment may result in entry of new players
               Product resistance should the product fail to get to the market appropriately
               Lack of opportunities for FDI at present to capitalise the project


      7.3       Competitive Advantages
                The following competitive advantages are envisaged:

                7.3.1   The Vantage Money‟s Vantage Banking Card operating on the SmartPay
                        Switch UEPS system will distinguish itself from competitors, such as use of
                        cash, cheques, prepaid, credit and debit cards in the following ways:

                   Little or no technology, and specifically no security, is required in the SmartPay
                    POS Terminal itself thus reducing costs and allowing the effective proliferation of
                    merchant points.

                   The SmartPay POS Terminal network can operate with or without the use of any
                    communications infrastructure.

                   The security encryption protocols enable cardholders to receive fund loading
                    instructions securely from a third party through any insecure communication
                    channel, such as word-of-mouth, telephonically, in newspaper, or any analogue or
                    digital network.

                7.3.2   The introduction of the Vantage Money‟s Vantage Banking Card as one of the
                        national payment systems as well as the setting up and establishment of the
                        UEPS SmartPay Switch has received the approval of the RBZ‟s NPS Unit.

                7.3.3   The operational synergies of Vantage Money and SmartPay Switch will
                        provide competitive advantage.

      7.4       Strategic Options
                The external, internal and SWOT analysis covered earlier raises issues that demand
                that we identify strategic options for our new business operation going forward,
                consequently the following options must be vigorously pursued:-




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             7.4.1   Sourcing of the requisite capital from the internal and external private sectors
                     as well as capital markets.

             7.4.2   Engaging the emerging markets and venture capital fund managers for equity
                     funding support.

             7.4.3   Engaging NGOs and the donor community for strategic implementation
                     partnerships.

             7.4.4   Employ market penetration strategies that emphasize on effective use of
                     publicity and promotional campaigns that focus on the benefits of the Vantage
                     Banking Card, and provision of differentiated products.

             7.4.5   Market expansion through the provision of banking services to the informal
                     sector as well as the unbanked and under-banked.




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Vantage Financial Services Group                                  Private Placement Memorandum

8.      MARKETING PLAN

     8.1 Broad Marketing Plans

        The Vantage Money and SmartPay Switch projects are being developed in order to achieve
        the desire of the sponsors to successfully launch the first ever smart banking card that offers
        financial products and services to the un-banked and under-banked without the need for on-
        line communications.

        In order to achieve this success it is imperative that careful consideration be given to customer
        segmentation, cost minimisation and containment strategies, as well as aspirations to
        differentiate the products and services in the market place in terms of uniqueness, customer
        care, the quality and variety of products and services as well as service quality delivery
        innovation.

        To this end, the Vantage Financial Services Group will implement a combination of “Market
        Challenger” and “Niche Market” strategies that will guide the Group in:

           Utilising information technology to develop and deliver innovative products and services
            cheaper;
           Developing targeted product and service promotions;
           Developing simple but prestigious value added products and services targeted at the
            unbanked and the under-banked; and
           Identify suitable branded retail stores and food chain strategic partners to provide
            alternative delivery channels in the form of In-store Banking Centres for the product.

        The concept is a smartcard based banking service that will serve the two broad market
        segments, i.e. the un-banked and under-banked in the personal and corporate markets. Its
        offerings will from the outset cover banking and payment services including, inter alia,
        deposit taking through an under-writer bank, cash advance lending, bill payment, payments
        for purchases and services, money transfer, etc.

        Ultimately, it is envisaged that the business concept will entail allied financial services such as
        micro-finance plus sales and payment of insurance premiums. It is, therefore, envisaged that




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      ultimately the business concept will be a provider of much broader financial services for the
      un-banked and under-banked.

      As for market development strategies, the sponsors‟ ambition is first of all to roll out the
      project from central hubs in Harare and in Bulawayo. The strategy then is to develop a
      network of strategic satellites and Vantage Money Shops around these two regional hubs.

                Cost leadership strategy: As this will be a green field project, there is ample scope
                 to avoid overloading it with unnecessary overheads. The strategy will be to come
                 up with a lean and focussed business model, which at the same time will be
                 effective in its deliverance of quality service to its chosen markets. The rollout
                 strategy of the Vantage Money Office network will be implemented in such a way
                 that the project earnings are not allowed to significantly lag behind the build up of
                 overheads.

                Economies of learning: The Group will employ effective and experienced staff.
                 This obviously tends to be expensive initially, but the hope is that the recruited
                 staff should be able to add value almost immediately. Experienced staff will also
                 help to minimise operational risk.

                Product technologies: as already mentioned, technology will be extensively used
                 to re-engineer banking products, processes and distribution channels so as to
                 achieve a superior service delivery to the unbanked and under-banked.

                Product design: product and service designs that are amenable to automation will
                 be the norm; “every product that lends itself to automation should be automated”.

                Managerial/organisational efficiency: in the final analysis, there is no substitute
                 for managerial efficiency. The ability of management to operate the business close
                 to its maximum efficiency will be critical and this is going to depend on the quality
                 of management we employ. Organisational slack or the so-called “X-inefficiency”
                 will be strictly controlled by management.

                Differentiation strategy: this strategy is about how you package and distribute
                 your products and achieve superior service delivery. This has a lot to do with the
                 quality of staff and management, its cultural orientation, and continuous training.
      8.2    Products and services
             Unlike ordinary fixed value smart cards in the market that are used to make payments
             and purchases, the Vantage Smart Banking Card offering will provide a wide range of
             banking and payment products and services as follows:




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             8.2.1   Salary and wage payments

                     The product eliminates the need for cash through the introduction of electronic
                     salary payments whose deposit is guaranteed by a financial institution. It
                     removes cash at the source, normally being the place of employment, by
                     allowing salaries and wages to be paid electronically, in either offline or online
                     environments, directly onto the UEPS card thereby removing the potential for
                     fraud, crime and violence normally associated with cash payments. It removes
                     the responsibility of theft claims against the employer by the employee as the
                     amount deposited to the card is precisely recorded and saved in the system.

                     BENEFITS TO THE EMPLOYER

                      Reduced bank fees
                      Reduced labour costs
                      Increased employee productivity

                     BENEFITS TO THE EMPLOYEE
                      Secure biometric fingerprint identification
                      Reduced bank charges
                      Accessible Money Transfers
                      Accessible third Party Account Payments
                      Separate additional member wallet on the client smart card
                      Interest-bearing Savings Wallets

             8.2.2   Third Party Host Deductions

                     The third party host deductions against value due for loading onto the cards
                     benefits financial service providers such as insurance companies, finance
                     houses, retailers etc who have not been in a position to service the unbanked
                     and under-banked market segments, since the risks involved in collecting their
                     monthly premiums far outweigh the potential revenue that can be earned.

                     BENEFITS TO THE FINANCIAL SERVICES PROVIDER
                      Reduced administrative / operational costs
                      Monthly premiums collected




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                     BENEFITS TO THE CARDHOLDER
                      Convenience of monthly payments deducted

             8.2.3   Money Transfers

                     Funds are remitted electronically and securely using biometric fingerprint
                     identification to transfer funds. An unbanked person can receive the cash
                     transfer from the Sender from any Smart card POS Terminals. Funds can be
                     loaded to a Recipient smart card either online or offline at a Smart Banking
                     POS Terminal

                     The U.E.P.S. offers the following Money Transfer options:
                                   PRIMARY2SAVINGS
                                   CARD2CARD
                                   CARD2PERSON WITH NO CARD OR BANK ACCOUNT
                                   CARD2BANK
                                   BANK2CARD

             8.2.4   Third Party Bill Payments

                     In order to offer convenience to our cardholders this product accommodates
                     “LINKED” and “ONE-OFF” third party account payments. This product
                     allows payments to be made at any POS Terminal to a specified linked or one-
                     off beneficiary.

             8.2.5   Cash Advances

                     A cash advance is granted to an individual who is employed on a permanent
                     basis, or who receives a sustainable monthly income such as a pension
                     payment. The reason for this requirement is to minimize the risk associated
                     with cash advances (i.e. loans) made to these individuals. A cash advance is a
                     small loan or advance on the individual‟s salary/wage/pension. It simplifies
                     the normal process of obtaining micro-loans by taking the form of an advance
                     granted by the employer to an employee based on their salary/wage/pension




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                     to be paid. It also eliminates the need to visit and queue in banking halls,
                     complete qualification processes and application forms, and dispenses with the
                     need for the client to return a few days later in order to collect the micro-loan
                     once approval has been granted.

             8.2.6   Social Grant Benefit Payments

                     The system seeks to eliminate previous inefficiencies and improve the lifestyles
                     of all its users. The system creates a secure and affordable transacting channel
                     between formal businesses or Government and the “un-banked” and “under-
                     banked” populations who have no or limited access to traditional banking
                     facilities.

                     BENEFITS TO GRANT BENEFICIARIES
                                      Convenience and security
                                      Reduced fraud and theft
                                      No need to stand in long queues at pay points
                                      Beneficiary can have access to selected UEPS products and
                                       services
                                      Reduction of transport costs
                                      Functionality to save and earn interest on card
                                      If the beneficiary loses their card, they do not lose their money

             8.2.7   Pension Collection & Distribution

                     Net1 has designed a unique system of collecting pension contributions to
                     alleviate non-payment of pension contributions from employers to pension
                     schemes, tracking and tracing of employers and employees and to include
                     efficient record-keeping of pension collections. The payment of pensions to
                     employees/government was designed to provide security in identifying the
                     rightful pension contribution payment owner. This system will dramatically
                     reduce the existing administration and operational costs involved in the
                     collection of contributions, payment of pensions and reporting of all activities.




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                     BENEFITS TO CONTRIBUTING EMPLOYEES
                                   Convenience – easy access to load pension payments
                                   Secure pension payments
                                   Spending and / or performing cash withdrawals at participating
                                    merchants
                                   Access to selected UEPS products and services
                                   Savings in separate wallet and earn interest on savings

             8.2.8   Retail Sales Payments
                     The Net1 Retail application manages the flow of electronic funds between
                     consumers, retailers, wholesalers and financial service providers. The solution
                     offers merchants a cashless payment system, designed to meet their specific
                     needs and the needs of their customers by offering security, affordability and
                     accessibility. Many of these merchants operate in under-developed areas where
                     traditional financial institutions and their products are unavailable or limited
                     due to the lack of communications infrastructures.

                     BENEFITS TO THE MERCHANT

                                   Increased turnover from a growing smart card client base
                                   Reduced cash holdings
                                   Reduced banking charges
                                   Reduced communication costs
                                   Reduced reconciliation problems.
                                   Reduced fraud and theft
                                   New income streams

                     BENEFITS TO THE CARDHOLDER
                                   Security - biometric fingerprint identification
                                   If the card is lost, the funds are not lost
                                   Reduced bank charges and ability to save and earn interest
                                   Access to selected UEPS products and services
                                   Separate spouse wallet on the same smart card




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Vantage Financial Services Group                             Private Placement Memorandum

             8.2.9   Wholesale Distribution
                     The Net1 wholesale distribution system offers wholesalers the facility to
                     eliminate the need of accepting payment in cash from distributors. The system
                     operates in the same manner as the retail application except that in this case,
                     the merchant/distributor is the client and the wholesaler becomes the
                     merchant.

                     BENEFITS
                       Reduced fraud and theft
                       Reduced operational and administrative costs

             8.2.10 Transportation
                     The transportation application was designed and developed by Net 1 to offer a
                     secure and effective electronic payment system for fare collections from
                     commuters to the Transportation Service Providers.

                     BENEFITS TO THE TRANSPORT COMPANY

                       Reduced fraud and theft

                       Reduced operational and administrative costs

                     BENEFITS TO THE COMMUTER
                       Convenience

                       If the commuter loses their card, they do not lose their money

                       Access to selected UEPS products and services

                       Secure – limited cash carried by commuter

             8.2.11 Loan Registration to the Card

                     This application allows for financial institutions to register loans on to the
                     UEPS card to enable the system to apply an automatic debit against any
                     incoming funds to the card in respect of the premium amount.

                     Once the member has been issued with a card, all applications for loans can be
                     registered onto the UEPS card for accurate and efficient loan controls and
                     procedures.




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Vantage Financial Services Group                               Private Placement Memorandum

                    BENEFITS TO THE MICRO FINANCIER

                      Security – biometric fingerprint identification

                      Secure loan repayments

                      Reduced fraud and theft

                      Reduced operational and administrative costs

                    BENEFITS TO THE CARDHOLDER

                      Secure and efficient loan repayments

                      Reduced credit risk

             8.2.12 Insurance Premium Payments

                    The Net1 UEPS Insurance System was designed to enable formal businesses to
                    market and sell their products to the public at large. The formal insurance
                    industry brings with it compliance to the rules and regulations governing the
                    industry, which are designed to protect its customers. The UEPS Insurance
                    System further facilitates adherence to these rules and regulations by utilizing
                    the key features of the UEPS technology.

                    This system allows for the cardholder to choose one of the insurance products
                    on offer and for the deductions to be made monthly from the smart card once
                    funds have been loaded to their smart card. This facilitates speedy settlement
                    of claims by presenting the deceased client‟s smart card. The policy is recorded
                    in the chip of the smart card which protects the cardholder in the event of a
                    claim arising and the insurance company having no evidence of the policy or
                    its related debit orders.

                    BENEFITS TO THE INSURANCE MERCHANT

                      Increased turnover

                      Reduced reconciliation problems

                      Reduced fraud and theft

                      Facilitates legislative compliance

                      Secure collection of monthly premiums

                      Security - biometric fingerprint identification




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Vantage Financial Services Group                             Private Placement Memorandum

                      MIS Reporting

             8.2.13 Loan Proceeds Deposited to the Card

                    The loan deposit to card was designed for Financiers to be able to participate in
                    the UEPS System and utilise the UEPS technology to minimise the cash amount
                    being paid out to their clients in respect of loans. Loans which are being made
                    to cardholders can be loaded electronically on to their smart cards instead of
                    dispensing cash.

                    BENEFITS TO THE MERCHANT

                      Reduced fraud and theft

                      Reduced cash held in merchant stores

                      Reduced operational and administrative costs

                      Security - biometric fingerprint identification

                      MIS Reporting

                    BENEFITS TO THE CARDHOLDER

                      Security - biometric fingerprint identification

                      Reduced theft – no cash is carried




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Vantage Financial Services Group                               Private Placement Memorandum

      8.3     Branding and Sales Strategies

              The branding of the project deliverables will be underpinned and leveraged by the
              value of the Vantage Money brand. To this end, the group has strategically set in
              motion a programme to raise and sustain the image of the brand. Some of the
              programmes will involve live television discussion programs as well as music related
              and sporting events.

      8.3.1   Attributes of successful selling

              Our success in the field of selling the Vantage Card will depend upon the degree of
              favourable customer responses to our selling efforts, which in turn are determined by
              our team‟s attitude, knowledge, power of persuasion, friendliness and skill. Attitude is
              the most important of the five attributes. With the right attitude, one can easily
              develop the other attributes. To this end, The Group‟s Sales teams will be skilled to be
              able to:

                 Manage their time effectively

                 Be fully prepared all the time

                 Be able to answer basic questions from the prospects

                 Be certain as to what he or she wants to accomplish during the sales call

                 Not think of the call as a studied professional presentation but as a way of doing
                  things

                 Have a clear idea of the prospect‟s needs and wants at that time

              The diagram below seeks to summarise and illustrate the above concept as well as the
              desired attributes of the sales team members:




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Vantage Financial Services Group                              Private Placement Memorandum




             Direct Sales Agents to be appointed and given sales targets and incentives to boost
             performance.

             Since the Vantage Financial Services Group is going to start with one large branch in
             Harare and another one in Bulawayo with satellites/agencies in Harare during the
             first year of operation. The business development and sales team will initially be fairly
             small. These Direct Sales Agents will be looked upon as the champions of business
             development, publicity and public relations.




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      8.4    Promotions

             Product promotion efforts are going to be one of the major critical success factors for
             card acceptance. To this end, the cost of promoting this new form of banking and
             payment system is going to be quite considerable. However, the promotion campaigns
             will need to be strategically focussed. For the corporate and government department
             customers, the approach will be to adopt direct marketing, i.e. person-to-person
             visitation, presentations at trade shows, district councils and company premises.

             The mass market, on the other hand, will be approached through mass communication
             means such as radio, television, the private press and visitations to institutions of
             higher learning such as universities, colleges and polytechnics.

      8.5    Pricing Strategy
             For a start, the Group cannot afford to deviate in any significant way from the
             charging structures practiced by other smart card issuers in the SADC region. There
             could be limited scope to differentiate the Group in terms of pricing, though
             ultimately, the Group‟s pricing strategy will be guided by the need to provide value
             for money without compromising on profitability. The feedback from most
             prospective customers, individuals as well as corporates, is that as long as the value
             they get matches the price they pay, they will be willing to pay any price.




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Vantage Financial Services Group                               Private Placement Memorandum


      8.6    Delivery Channels
             Strategic alliances with Chain Stores, through say stakeholder participation in the
             ownership structure of the SmartPay Switch, are very important. Networking
             strategies will be devised so as to understand our core customer needs and concerns.

      8.7    Customer Retention
             In order to ensure client retention, strategies will be implemented that provide value
             addition in the form of participation fees for key players and loyalty programmes for
             the Vantage Card holders.

      8.8    Marketing Plan Implementation

             Below is a summary of the strategies for the marketing plan implementation:

             8.8.1   Capital Raising

                     Momentum will be generated towards the unveiling of the project by way of
                     production of associated newspaper articles and press releases that include
                     events and activity outlines plus dissemination of information to potential
                     investors, about the project to the extent possible that there will be testimonies
                     from users.

                     Assignment to be implemented by 31 May 2010.

             8.8.2   Project Implementation Marketing

                     The following strategies are planned:

                           Penetrating the market by issuing a card to the most influential people
                            in society. Those people will be facilitated to perform various banking
                            and payment transactions and these activities will be recorded on
                            electronic and print media and used on campaigns flighted through
                            various    media.    Related     activities   to   include   road   shows,
                            advertisements, and use of testimonials by those who will have
                            personally experienced the product.

                           Through the Ministry of Finance and the Auditor and Comptroller
                            General, market for the Civil Service Employees and Pensioners to have




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Vantage Financial Services Group                              Private Placement Memorandum

                            part of or their full salaries and pensions deposited into the Vantage
                            Smart Banking Card Account.

                           Market the employees of Employers within our Agency Network to
                            have part of or their full salaries deposited into the Vantage Smart
                            Banking Card Account.

                           Enter into strategic relationships with agricultural associations such as
                            Cottco and GMB with a view of issuing the card to farmers.

                           Market the mining communities through their respective management

                           Market employees of Estate Plantations such as Tanganda Tea, Hippo
                            Valley and Triangle Sugar Estates to have part of or their full salaries
                            and pensions deposited into the Vantage Smart Banking Card
                            Accounts.

                           Smart Card POS Terminals to be installed in all major and popular
                            merchant networks.

                           Market Wholesalers and Retailers to facilitate issuance of Smart Cards
                            for use in the procurement of goods.

                      Assignment to be implemented from 31 May 2010.

             8.8.3   Product Introduction Marketing

                     The strategy is to ensure that the people have a feel of the product i.e. emphasis
                     should be on an educative programme where people are taught how to use the
                     product, where to find the product, and the benefits of using the product.
                     Those who have experienced it will be coordinated to testify the benefits of the
                     product and respective opinion leaders are used to testify.

                      Assignment to be implemented from 1 December 2010.

             8.8.4   Continuous Product use Marketing

                     This will be done by way of use-linked promotions, e.g. use-linked
                     competitions, use-linked educational programmes, product pronunciations,
                     plus mobile public cinemas i.e. programmes will be designed to suit different
                     markets.




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Vantage Financial Services Group                               Private Placement Memorandum

                      Assignment to be implemented from January 2011.

             8.8.5   Marketing the Product and Opportunities

                     This will involve marketing relating to other uses of the product, e.g. linking
                     the product to other markets, e.g. agricultural inputs, Anti Retro Viral (ARV)‟s,
                     food aid grants, etc. This will involve pushing the product to be felt to be part
                     of peoples‟ lives.

                      Assignment to be implemented from January 2011.




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9.    OPERATIONS PLAN

      The success of this business plan will critically depend on the clarity of the operational plans
      for both businesses.

      9.1    Short-Term Plans

             The proposed implementation plans and strategic options to ensure a successful
             nation-wide rollout will be guided as follows:

             9.1.1   SmartPay Switch

                     The implementation programme will entail the following:


                           The purchase of the required IT Systems and UEPS software from Net1
                            and installation at the chosen site in Harare.

                           Install SmartPay Switch POS Terminals at strategic merchant locations

                           Implementation of the project initially as a pilot with ZUPCO and
                            thereafter full operations commenced with the underwriter bank and
                            Vantage Money as the only Financial Institutions (FIs) issuing of Smart
                            cards on the system

                           Following a successful launch, other FIs such as Commercial Banks and
                            large corporates will be invited to join as Members or Investors to the
                            SmartPay Switch in order to issue their own cards (a Reserve Bank of
                            Zimbabwe licensing condition)

             9.1.2   Vantage Smart Banking Card

                     The Vantage Smart Banking Card implementation programme will entail the
                            following:


                           The design and procurement of the cards from Net1

                           Identification and securing of Pilot programme partners, preferably
                            ZUPCO

                           Implementation of the project initially as a pilot with ZUPCO and
                            thereafter full rollout will be commenced with Zimpost Offices acting as
                            Agent offices for applicant processing, enrolment and customer care




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Vantage Financial Services Group                                  Private Placement Memorandum

                              Following a successful launch in Harare, the programme will be
                               extended to Bulawayo and thereafter to other areas countrywide

        In summary, the following initial project implementation plans are envisaged:

            OBJECTIVE                                                                  DEADLINE

            1. Complete Business Plan/Private Placement Memorandum                        22 May 2010

            2. Commence Capital Raising Road Shows                                        31 May 2010

            3. Design effective material for publicity campaign                           30 June 2010

            4. Obtain Additional Project Funding Guarantee(s)                             30 June 2010

            5. Confirm Order for Project IT Systems and Resources                         30 June 2010

            6. Complete Office Refurbishments                                          31 August 2010

            7. Secure Additional Project Funding                                          15 July 2010

            8. Complete staff recruitment for the Operations                       30 September 2010

            9. Receive Order for Project IT Systems and Resources                  30 September 2010

            10. Implement Pilot Projects                                              29 October 2010

            11. Launch Projects                                                    15 November 2010


      9.2       Strategic Plans

                The following proposed strategic Vantage Smart Banking Card regional
                implementation plans assume a successful launch of the Zimbabwe projects and
                availability of related capital:

                 PLANNED ACTIVITY                                   IMPLEMENTATION

                 1. Launch Vantage Card in Malawi                   During 4th Quarter of 2011

                 2. Launch Vantage Card in Namibia                  During 4th Quarter of 2012

                 3. Launch Vantage Card in Zambia                   During 4th Quarter of 2013

                 4. Launch Vantage Card in S Africa                 During 4th Quarter of 2014




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Vantage Financial Services Group                                 Private Placement Memorandum

             Depending on the results of planned market studies, the above regional expansion
             plans may be reviewed and or varied.

9.3   Operational Risk Management Strategy


             The Vantage Financial Services Group's risk management processes will be built on a
             foundation of proactive identification, understanding and measurement systems,
             which are continuously reviewed and modified in line with environmental changes
             affecting the business of the Group.

             The major risks that the Group will be exposed to are market risk, interest rate risk,
             credit risk, solvency risk, currency risk and compliance risks. The Group‟s internal
             credit and risk management policies and procedures will focus on these risks as
             follows:

             Market risk:          This covers the potential changes in the value of financial
                                   instruments held as a result of alterations in market perception
                                   following changes in interest, inflation and foreign exchange rates.
                                   The group will put in place procedures to regularly forecast and
                                   measure market risk exposures using advanced simulation models
                                   supported by a comprehensive analysis of local economic, political
                                   and social fundamentals.

             Interest rate risk:   Measured by the interest rate re-pricing gap between assets and
                                   liabilities, this covers the impact on income arising from changes in
                                   interest rates. Generally this risk will be regularly measured and
                                   managed on a value at risk basis, limiting total exposure to general
                                   interest rate movements.

             Credit risk:          This is the potential of loss arising from the default by counterparts
                                   enjoying cash advance facilities extended through the Vantage Card
                                   facility and utilising Vantage Money funding. This risk will be
                                   managed through a comprehensive system of credit analysis,
                                   approval and review.       Regular analysis and review will be




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Vantage Financial Services Group                              Private Placement Memorandum

                                undertaken on any counterpart on whom any credit risk is taken,
                                with related credit limits determined in line with approval limits as
                                delegated by the Executive Committee.

             Liquidity risk:    This risk is linked to the extent to which mismatches in the
                                company‟s cash flows impact on its ability to meet its financial
                                obligations when they fall due.       Complemented by cash flow
                                forecasting, gap analysis and portfolio diversification, The Group
                                will endeavour to match all the maturities of financial instruments
                                held in its treasury, money and capital market investments
                                portfolios with the maturity of any related funding.

             Currency risk:     Currency risk arises when changes in foreign exchange rates
                                exacerbate mismatches between currency inflows and outflows.
                                The company will set internal limits based on an analysis of
                                fluctuations in currencies held.

             Solvency risk:     The Group will ensure that it is adequately capitalised to absorb
                                potential losses to give the company‟s stakeholders confidence that
                                it has sufficient resources to operate.        The company will set
                                guidelines that, at a minimum, comply with statutory requirements
                                prescribed by the Reserve Bank of Zimbabwe.

             Compliance risk:   In addition to adherence to its own internal credit and risk
                                management     procedures,    as   well   as   corporate   governance
                                guidelines, the Group will work closely with the Reserve Bank of
                                Zimbabwe to ensure continued regulatory compliance. This will
                                include providing Reserve Bank of Zimbabwe with regular reports
                                and the submission of at least quarterly returns.

             9.3.1   Anti-Money Laundering Guidelines

                     In order to comply with Anti-Money Laundering (“AML”) guidelines, the
                     following minimum information will be obtained before an applicant is
                     enrolled as a Vantage Card client:




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Vantage Financial Services Group                                 Private Placement Memorandum

                     i)       Zimbabwean citizens and residents will be required to supply
                              documentary evidence of:

                              (a)       Full Names;

                              (b)       Date of Birth;

                              (c)       Identity Document with Photo;

                              (e)       Residential address.

ii)   Foreign nationals will be required to supply documentary evidence of:
                             (a)    Full Names;

                              (b)       Date of Birth;

                              (c)       Nationality;

                              (d)       Passport number;

                              (e)       Residential address.

             9.3.2   Risk Management Principles for Electronic Banking
                     The Group's existing risk management policies and processes will be evaluated
                     to ensure that they are robust enough to cover the risks posed by the planned
                     activities. Additional risk management oversight steps that the Board and senior
                     management will be taking include:




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Vantage Financial Services Group                                 Private Placement Memorandum

                                   Clearly establishing the organisations‟ risk appetite in relation to
                                    e-banking reputation (e.g. networks penetration, employee access
                                    levels and any serious misuse of computer facilities)
                                   Addressing any unique risk factors associated with ensuring the
                                    security, integrity and availability of e-banking products and services,
                                    and requiring that third parties to whom the Group operations
                                    outsources its key systems or applications take similar measures
                                   Ensuring that appropriate due diligence and risk analysis are
                                    performed before the Group companies conduct cross-border e-
                                    banking activities
                                   Assignment of explicit management/staff responsibility for
                                    overseeing the establishment and maintenance of corporate security
                                    policies
                                   Sufficient physical controls to prevent unauthorised physical
                                    access to the computing environment
                                   Sufficient logical controls and monitoring processes to prevent
                                    unauthorised internal and external access to e-banking applications
                                    and databases
                                   Regular review and testing of security measures and controls,
                                    including the continuous tracking of current industry security
                                    developments and installation of appropriate software upgrades,
                                    service packs and other required measures
                                   The Group fully understands the risks associated with entering
                                    into an outsourcing or partnership arrangement for its e-banking
                                    systems or applications
                                   An appropriate due diligence review of the competency and
                                    financial viability of any third-party service provider or partner is
                                    conducted prior to entering into any contract for e-banking services
                                   The contractual accountability of all parties to the outsourcing or
                                    partnership relationship is clearly defined. For instance, responsibilities

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Vantage Financial Services Group                                Private Placement Memorandum

                                   for providing information to and receiving information from the
                                   service provider should be clearly defined
                                  The Group has a responsibility to provide service institutions
                                   with information necessary to identify, control and monitor any
                                   risks associated with the e-banking service arrangement

             9.3.3   Control and Monitoring Systems
                     The following control and monitoring systems will be implemented in order to
                     enhance business controls and monitoring systems:

                                  All actual expenditure to be subject of prior approval at relevant
                                   authority levels before commitment;

                                  Product performance will be measured monthly and reviewed
                                   quarterly numerically and by value against targets set from time
                                   to time per branch and countrywide;

                                  Performance against the competition to be measured on a
                                   monthly basis and reviewed quarterly; and

                                  The product enhancement proposals will be subject of prior
                                   approval before any major costs are incurred or committed




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Vantage Financial Services Group                              Private Placement Memorandum

10.   BUSINESS MANAGEMENT

      Assuming that the required capital is secured, the successful implementation of the proposed
      business plan, incorporated in this private placement memorandum, is assured due to the
      expected convergence of the key skills and passions of the main sponsors of this project.

      10.1   Key Team Members

             The following are the current key members of the Board and Management who will
             guarantee the project‟s success through their skills and personal passions vested in this
             project:

      10.2   Board and Management Team Gaps

             Additional team members at Board level will be sought to bring in the skills required
             to set up effective Board Committees. At the managerial and ordinary staff levels, the
             best recruits will engaged from the glut that‟s available on the market due to non-
             activity at Commercials Banks due to the general public‟s current lack of confidence in
             the traditional banks‟ ability to provide them with their money in United States dollars
             on demand if they place it in banking accounts with them.

      10.3   Group Board Members’ Appointments

             In addition, to independent directors, Group Boards will be fully constituted following
             the conclusion of the capital raising exercise that is underway, which Boards will be
             representative of the new shareholding structures.

             The Boards will be tasked with recruiting and ratifying the appointment of senior
             managers of the Company. Similarly membership to the management committees will
             be appointed and ratified by the new Boards in due course.




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Presenting the Smart Banking Card and POS Terminal to the President of Ghana




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Vantage Financial Services Group                                Private Placement Memorandum

11.    FINANCIAL PLAN

       11.1    Basis of preparation and critical assumptions

               The financial projections have been prepared based on management‟s best estimates
               on future performance assuming the required financing is available when required to
               finance the various business units and in accordance with normal accounting policies
               applicable to the industry.

       11.1.1 The following general assumptions were made during the preparation of the Business
              Plan:

                             Sustained growth in disposable incomes.

                             Current HIV/AIDS prevalence levels are assumed to be maintained as
                              well as their impact on the economically productive population.

                             Availability of capital for the identified IT systems, new products and
                              services.

                             Successful recruitment and retention of appropriate specialist staff.
                             Current changes in the political and economic environment will
                              positively affect the Group‟s business.
                             The Group will continue to enjoy the goodwill and patronage of its
                              customers.
                             The Group will experience growth in its customer base in line with the
                              projected demand for savings account and payment system.

                             Remuneration projections to be reviewed periodically against company
                              performance and related market players‟ practice and adjustments
                              made as necessary.




11.1.2 The following specific assumptions were made during the preparation of the financial
projections:




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           Vantage Financial Services Group                                           Private Placement Memorandum




Assumptions on Smart Cards Financial
Projections:                                   YEAR 2010/2011   YEAR 2011/2012   YEAR 2012/2013   YEAR 2013/2014    YEAR 2014/2015

Number of new Smart Cards Issued                      300,000          450,000          675,000         1,012,500         1,518,750

Average Number of Cards in Circulation                300,000          375,000          562,500          843,750          1,265,625
Average Value of transaction                           $20.00           $30.00           $45.00           $60.00            $60.00
Average Number of Transactions per Card per
year                                                       12               24               30               36                36
Average Number of POS Terminals @ 200 cards
per terminal                                              200            2,000            2,500            3,000             5,000
Average Smart Card Account Balance                     $30.00           $45.00           $90.00          $120.00           $120.00
Money Market Investment Return                            5%               5%               5%               5%                5%


Assumptions on Vantage Money Financial
Projections:                                   YEAR 2010/2011   YEAR 2011/2012   YEAR 2012/2013   YEAR 2013/2014    YEAR 2014/2015

Number of new Vantage Money Cards Issued              300,000          450,000          675,000         1,012,500         1,518,750

Average Number of Cards in Circulation                300,000          375,000          562,500          843,750          1,265,625
Average Value of transaction                           $20.00           $30.00           $45.00           $60.00            $60.00
Average Number of Transactions per Card per
year                                                       12               24               30               36                36
Average Number of POS Terminals @ 200 cards
per terminal                                              200            1,250            2,250            2,750             4,000
Average Vantage Money Card Account Balance             $30.00           $45.00           $90.00          $120.00           $120.00
Money Market Investment Return                            5%               5%               5%               5%                5%



                     11.2     Detailed Revenue Streams

                              Ongoing revenues will be derived as follows:

                              11.2.1 Vantage Smart Banking Card
                                         The following are the main sources of revenue from the issuance of the Card:

                                             Card and Enrolment Fee
                                             Card Replacement Fee
                                             Service Fee (Monthly)
                                             Cash Withdrawal Fee
                                             Cash Deposit Fee
                                             Balance Enquiry - (Print POS Slip)
                                             Mini Statement – (Print on POS Slip)
                                             Local Transfer - Card2Card - SENDER




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Vantage Financial Services Group                             Private Placement Memorandum

                        Local Transfer - Card2Phone (USN Number) - SENDER
                        Local Transfer - Card2Person (Non Card Holder) - SENDER
                        Local Transfer - Card2Other - SENDER
                        Local Transfer - Card2Bank Account (Customised integration – SmartPay
                         Switch & Banks) -(SENDER)
                        Local Transfer - Bank Account2Card (Customised integration – SmartPay
                         Switch & Banks) -(Recipient)
                        Bill Payment 3rd Party Linked Account - SENDER
                        Bill Payment 3rd Party Once off Account - SENDER
                        Bill Payment 3rd Party Deduction Fee per Deduction
                        Cash Advance set-up fee
                        Cash Advances Late Payment Penalty Fee
                        Payroll 10 Digit Code Creation Fee per Beneficiary
             11.2.2 SmartPay Switch
                    The following are the determined sources of revenue from the establishment of
                    the SmartPay Switch and the rollout of the SmartPay Switch POS Terminals:

                        Transaction Fee for Online Batch Settlement to Merchants

                        Transaction Fee for Offline Batch Settlement (Milking)


      11.3   Financial Performance, Cash Flows and Financial Position forecasts

                   The following projected financial statements are attached as appendices to this
                    Private Placement Plan:

             11.3.1 Vantage Money & Payment Systems (Private) Limited

                    Critical assumptions on the Financial Projections:

                    In view of the current shortage of United States Dollar and Rand currency
                    notes and coins, the projected number of Smart Cards to be issued and the
                    banking and payment transactions per card holder are considered attainable.

                    Smart Card sales will be enhanced by the marketing strategies as discussed
                    under Item 8.7 of the Marketing Plan Implementation.




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Vantage Financial Services Group                             Private Placement Memorandum

                    In order to minimise price resistance, it is planned that Employers, NGOs and
                    Pension Funds will be committed to meet the initial or part of the cost of the
                    Smart Card.

                    The projected ROA and ROE may appear high as from the 2nd year of
                    operation, but since a solution for the current banking and payment challenges
                    is required immediately, the projected transactional volumes are considered
                    attainable.

             11.3.2 Smartpayment Solutions (Private) Limited

                    Comments on the Financial Projections:

                    Since Net1 Technologies provide a turnkey solution, the budget for the
                    acquisition of the UEPS system includes the full cost of hardware and software
                    as well as installation costs.

                    Net1 Technologies will provide Disaster Recovery Site facilities for the Card
                    Management system. To this end, communication links via internet will be
                    established and tested.

                    Although revenues may appear high, the estimated number of potential
                    transactions per card holder in the view of the directors has been
                    conservatively estimated. The transaction volumes will however depend on the
                    number of POS Terminals installed as well as their utilisation.

                    Installation of POS Terminals in the merchant network will not pose challenges
                    as Zimbabwe merchants have been using such payment means for over 15
                    years and the merchant discount fee of 0.50% is comparable to that for debit
                    cards and lower than the 2 – 5% for credit cards.




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Vantage Financial Services Group                         Private Placement Memorandum


      11.4   Directors’ Responsibility Statements

             11.4.1   Vantage Money & Payment Systems (Private) Limited




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             11.4.2 Smartpayment Solutions (Private) Limited




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Vantage Financial Services Group                             Private Placement Memorandum

12.   LEGAL AND STATUTORY PROVISIONS

      12.1   Constituent Documents

             12.1.1 Incorporation

                    a)     Vantage Financial Services (Private) Limited was incorporated in
                           Zimbabwe on 12 February 2010 under company registration number
                           443/2010 and the registered office address is 8th Floor, Finsure House,
                           Corner Kwame Nkrumah Avenue and Sam Nujoma Street, Harare,
                           Zimbabwe.

                    b)     Vantage Money & Payment Systems (Private) Limited was incorporated
                           in Zimbabwe on 28 December 2007 under company registration number
                           33536/2007 and the registered office address is 56 Northampton
                           Crescent, Eastlea, Zimbabwe.

                    c)     Smart Payment Solutions (Private) Limited was incorporated in
                           Zimbabwe on 5 October 2009 under company registration number
                           1962/2009 and the registered office address is 56 Northampton
                           Crescent, Eastlea, Zimbabwe.

             12.1.2 Memorandum and Articles of Association

                    Below are extracts from the relevant provisions:

                    a)     Vantage Financial Services (Private) Limited

                           Powers and Duties of Directors

                           (Object a))

                           To carry on the trade and or business of an investment holding
                           company (in the listed stock and money market locally and
                           internationally), together with any such business usually carried on in
                           connection thereof;

                           Borrowing Powers

                           (Article 16)

                           The Directors may raise or secure the repayment of such monies in such
                           manner and upon such terms and conditions in all respects as they may
                           think fit particularly by the issue of debenture stock, bonds, obligations
                           and mortgages of the Company both present and/ or future, including




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Vantage Financial Services Group                            Private Placement Memorandum

                          its uncalled capital for the time being, or by accepting or endorsing on
                          behalf of the company, any promissory notes of exchange or mortgage
                          bonds or in any other manner authorised by the Memorandum of
                          Association.

                    b)    Vantage Money & Payment Systems (Private) Limited

                          Powers and Duties of Directors

                          (Object a))

                          To carry on the trade and or business of banking and electronic money
                          transfer agents and consultants in public and private companies, as well
                          as in capital markets, together with any such business usually carried
                          on in connection therewith;

                          Borrowing Powers

                          (Article 16)

                          The Directors may raise or secure the repayment of such monies in such
                          manner and upon such terms and conditions in all respects as they may
                          think fit particularly by the issue of debenture stock, bonds, obligations
                          and mortgages of the Company both present and/ or future, including
                          its uncalled capital for the time being, or by accepting or endorsing on
                          behalf of the company, any promissory notes of exchange or mortgage
                          bonds or in any other manner authorised by the Memorandum of
                          Association.

                    c)    Smartpayment Solutions (Private) Limited

                          Powers and Duties of Directors

                          (Object a)

                          To carry on the trade and or business of enhancing payment systems by
                          operating a switch which links the payment system of banks and other
                          financial institutions and these to include but not limited to card issuing
                          companies, savings and loan companies, credit unions, money transfer
                          institutions and rural and urban banks; to promote banking inclusion




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Vantage Financial Services Group                               Private Placement Memorandum

                             and branchless banking including the enhancement of microfinance
                             institutions, together with any trade or business usually carried on in
                             connection therewith;


                             Borrowing Powers

                             (Article 68)

                             The Directors may from time to time at their discretion raise or borrow
                             or secure the payment of any sum or sums of money for the purposes of
                             the Company, and the Directors may raise or secure the repayment of
                             such monies in such manner and upon such terms and conditions in
                             such manner and upon such terms and conditions in all respects as they
                             may think fit, in particular by the issue of mortgage charges,
                             debentures, debenture stock, bonds or notes of the company charged
                             upon all or any part of the property of the Company open (both present
                             and future) including its uncalled capital for the time being and
                             redeemable by instalments payable out of the profits of a Company, or
                             by means of a sinking fund or otherwise, and generally upon such
                             terms and conditions and in such manner as the Directors may
                             determine.

      12.2   Agreements and Other Documents

             Copies of the following documents will be available for inspection at the Vantage
             Financial Services (Private) Limited registered offices during normal business hours
             from 08:00 hours to 16:00 hours from the date of this Offer Document to the date of
             closing the Offer:

             12.2.1          Vantage Financial Services Group Companies

                     Certificates of Incorporation;

                     Memoranda and Articles of Association;

                     Any related documentation on file in relation to the registration of the
                      companies




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Vantage Financial Services Group                             Private Placement Memorandum

                   Any Memoranda of Understanding with Strategic Partners; and

                   Any Annual Returns




      12.3   Pending Litigation

             The Directors of the group companies are not aware of any legal or arbitration
             proceedings (including any such proceedings, which are pending or threatened),
             which may have a significant effect on the financial position of the either the Group or
             any of its subsidiaries.




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13.   APPENDICES

      The following appendices are attached:

      13.1   Five Year Financial Projections

             13.1.1 Vantage Money & Payment Systems (Private) Limited

             13.1.2 Smart Payment Switching Solutions (Private) Limited

      13.2   Selected Potential Clients‟ Support Letters

      13.3   Regulatory Approval and Support Letters




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