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Presentation to the Portfolio Committee
on Agriculture and Land Affairs
27 March 2007
2006/07 F/Y Performance Review
• Provincial spread of the portfolio• Portfolio mix: Mortgage vs Equity • Sectoral mix: Agriculture vs Eco-Tourism• New projects approved• Rate Conversion: JIBAR to Prime-linked • Banks and other RFI’s participation• LREF BEE Scorecard
• RFI Margin Cap
2007/08 Business plan
• Grow loan book by R40m• Grow projects numbers by 10• Emphasis in Free State, Limpopo, Northern
Cape, Mpumalanga and Northwest• Improve portfolio mix • Facilitate beneficiaries training and capacity
building• Financial Review
Strategic initiatives
• Khula/Mafisa project • Khula/TSB/ABSA project• Khula/dti Eco-Tourism potential Funding
Challenges• Disbursements• Loan size per project • Dependence on LRAD• Capacity building
PROVINCIAL SPREAD: CUMULATIVE INVESTMENTS
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
50.00%
MAR '05
MAR '06
MAR '07
FEB '07
MAR '05 6.00% 0% 0.45% 30.30% 3.80% 6.10% 3.40% 4.60% 45.10%
MAR '06 5.00% 0% 0.30% 28.00% 2.90% 13.80% 11.00% 4.30% 34.50%
MAR '07 6.40% 5.00% 1.80% 23.20% 4.70% 13.40% 10.00% 5.00% 28.00%
FEB '07 9.51% 0% 4.08% 23.68% 2.50% 11.84% 9.45% 6.49% 31.62%
EC FS GP KZN LP MP NC NW WC
65%
35%
59%
41%
55%
45%
60%
40%
PORTFOLIO MIX: EQUITY VS MORTGAGE
MORTGAGE
EQUITY
MORTGAGE 35% 41% 45% 40%
EQUITY 65% 59% 55% 60%
MAR '05 MAR '06 MAR '07 FEB '07
ECO-TOURISM VS AGRICULTURE
153,081,742 (90%)
16,673,000 (10%)
ECO -TOURISM
AGRICULTURE
New Projects Approved
Name of Project Channel Partner
Loan Amount
PDI’s Shareholding
Province Enterprise Beneficiaries
Male Female Total
Simile Farm Trust STD 2,880,000 100% E.Cape Poultry 6 - 6
PennyBEE Dairy FNB 1,393,000 50% E.Cape Dairy 14 12 26
Galaxtic Deals FNB 3,400,000 49% E.Cape Citrus 31 2 33
Inthaba Farming ABSA 1,100,000 55% E.Cape Goats 13 1 14
Evening Flame ABSA 3,700,000 25% Gauteng Poultry 8 9 17
RZT Zelpy ABSA 2,800,000 30% N.Cape Grapes 61 57 118
Die Eilands ABSA 800,000 30% W.Cape Ostrich & Lucern
15 9 24
Vukanathi ABSA 4,700,000 72% N.West Poultry 6 8 14
Bambanani STD 4,100,000 25% Gauteng Stone Fruit 29 26 55
Endulini Sunday River
FNB 7,840,000 40% E.Cape Citrus 25 25 50
Total 32,713,000 208 149 357
RATE CONVERSION: JIBAR TO PRIME-LINKED
• All existing projects converted to prime-linked rates• New projects approved on prime-linked rates• Less Cumbersome admin process• 3% margin Cap on Retail Financial intermediaries to
projects
BANKS AND OTHER RFI's PARTICIPATION (LREF)
67,845,500, (40%)
4,000,000, (2%)10,243,000,(6%)
8,189,000, (5%)5,200,000, (3%)
30,600,000, (18%)
43,677,242, (26%)
ABSA
NEDBANK
FNB
STD
ITHALA
IDC
SPIER
LREF BEE SCORECARD
[a] DIRECT EMPOWERMENT Weight
Ownership (shares) and control 20%
Participation in Decision Making [Average] 20%
Aggregate Weight & Score 40%
[b] HR DEVELOPMENT PLAN & EMPLOYMENT EQUITY
Skills Development & Learnerships 22.5%
Gender Equity 22.5%
Aggregate Weight & Score 45%
[c] STAFF WELFARE
Compliance to Minimum Wage Legislation 5%
Aggregate Weight & Score 5%
[d] RESIDUAL (including indirect empowerment)
Enterprise and Rural Development. 5%
Procurement, Job Creation, etc. 5%
Aggregate Weight & Score 10%
Weighted Average Score 100%
Calculated @ Prime = 12.5%
RFI MARGIN CAP
Project Score Jibar Rate Equivalent Chg To RFI Max Chg To End User
Up to 33 Jibar – 0.65% Prime – 4.07% 8.43% 11.43%
34 To 67 Jibar – 1.15% Prime – 4.57% 7.93% 10.93%
68 To 100 Jibar – 1.65% Prime – 5.07% 7.43% 10.43%
FINANCIAL REVIEW
FY March 2007Budget
Year-to-date actualFebruary 2007
BudgetMarch 2008
Operating Income 6,869,200 6,310,977 8,797,676
Operating Expense 3,881,150 1,873,742 4,647,702
Investment Income 3,317,150 8,140,605 8,413,762
Total Net Income 6,305,200 12,613,841 12,565,736
KHULA/MAFISA PARTNERSHIP• Khula/Mafisa Agreement• Production inputs• Target: BEE farmers• 100k – 300k per PDI• Up to R100k: Fund 90%: Bank(10%)• R100k-R200k: Fund 80%: Bank(20%)• R200k-R300k: Fund 70%: Bank(30%)• Interest rate to end-user @ Prime(Max)• 1% Indemnity Fee to RFI
Qualifying Criteria for MAFISA
• Off-take agreement for farmers produce• Insurance for all crops• Interest rate to farmers not more than Prime• Assistance package to includeMechanisation for:
Soil preparation Planting Weed cultivation Chemical application Spraying Harvesting
• Project management and farmer mentorship.
KHULA/TSB/ABSA
• Initiative to create a fund• Size of the fund R50m • Objective: settle at least 50 emerging farmers• Enterprise: sugarcane • Province: Mpumalanga(Malelane)
KHULA/DTI
• Khula in negotiations with the dti for funds to continue funding potential Eco-Tourism projects
• Khula is in the process of structuring a proposal to the dti
Challenges
• Disbursement bottlenecks• Loan size per project• Dependence on LRAD• Capacity building • The bulk of the applicants are still coming from
the Western Cape and KZN
Thank You