Download New Projects Approved

Presentation to the
Portfolio Committee
on Agriculture and
Land Affairs
27 March 2007
2006/07 F/Y Performance
Review
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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
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Disbursements
Loan size per project
Dependence on LRAD
Capacity building
PROVINCIAL SPREAD: CUMULATIVE INVESTMENTS
50.00%
45.00%
40.00%
35.00%
MAR '05
30.00%
MAR '06
25.00%
MAR '07
20.00%
FEB '07
15.00%
10.00%
5.00%
0.00%
EC
FS
GP
KZN
LP
MP
NC
NW
WC
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%
PORTFOLIO MIX: EQUITY VS MORTGAGE
35%
41%
45%
40%
MORTGAGE
65%
EQUITY
60%
59%
55%
MAR '05
MAR '06
MAR '07
FEB '07
MORTGAGE
35%
41%
45%
40%
EQUITY
65%
59%
55%
60%
ECO-TOURISM VS AGRICULTURE
16,673,000
(10%)
ECO -TOURISM
AGRICULTURE
153,081,742
(90%)
New Projects Approved
Name of Project
Channel
Partner
Loan
Amount
PDI’s
Shareholding
Province
Enterprise
Beneficiaries
Male
Simile Farm Trust
STD
2,880,000
100%
E.Cape
Poultry
PennyBEE Dairy
FNB
1,393,000
50%
E.Cape
Galaxtic Deals
FNB
3,400,000
49%
Inthaba Farming
ABSA
1,100,000
Evening Flame
ABSA
RZT Zelpy
Female
Total
6
-
6
Dairy
14
12
26
E.Cape
Citrus
31
2
33
55%
E.Cape
Goats
13
1
14
3,700,000
25%
Gauteng
Poultry
8
9
17
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
208
149
357
Total
32,713,000
RATE CONVERSION: JIBAR TO PRIMELINKED
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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)
5,200,000, (3%)
8,189,000, (5%)
67,845,500, (40%)
30,600,000, (18%)
ABSA
NEDBANK
FNB
STD
ITHALA
IDC
SPIER
43,677,242, (26%)
4,000,000, (2%)
10,243,000,(6%)
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%
Compliance to Minimum Wage Legislation
5%
Aggregate Weight & Score
5%
[c] STAFF WELFARE
[d] RESIDUAL (including indirect empowerment)
Weighted Average Score
Enterprise and Rural Development.
5%
Procurement, Job Creation, etc.
5%
Aggregate Weight & Score
10%
100%
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%
Calculated @ Prime = 12.5%
FINANCIAL REVIEW
FY March 2007
Budget
Year-to-date actual
February 2007
Budget
March 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
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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
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Off-take agreement for farmers produce
Insurance for all crops
Interest rate to farmers not more than Prime
Assistance package to includeMechanisation for:
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Soil preparation
Planting
Weed cultivation
Chemical application
Spraying
Harvesting
• Project management and farmer mentorship.
KHULA/TSB/ABSA
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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
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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