KHULA ENTERPRISE FINANCE LTD

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• KHULA ENTERPRISE FINANCE LTD
• LAND REFORM EMPOWERMENT FACILITY
• PRESENTATION TO THE AGRICULTURE LAND AFFAIRS
  PORTFOLIO COMMITTEE
• Presenters Sandile Luthuli George Mothoa
• Date 18 March 2005

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Background Introduction

• DLAs research conducted in 1998
• Partnership approach with the PRIVATE SECTOR in
  facilitating the establishment of VIABLE land
  reform projects
• Wholesale revolving funding facility to provide
  highly concessionary (flexible repayment terms,
  lower transaction costs and reduced cost of
  capital) loans
• Sources of capital
• Department of Land Affairs (R117m)
• European Union (R27m)
• Danish Development Agency (R1.7m)
• Department of Environmental Affairs Tourism
  (R20m)

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Programmes Implemented

• Broad-Based Black Economic Empowerment Act
• Financial Sector Charter
• AgriBEE Charter (development stage)
• Tourism Charter (development stage)

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Market Offering

• Product Types
• Mortgage Loans
• Equity Share Schemes
• Target Sectors
• Primary Secondary Agriculture
• Eco-Tourism
• Target Market
• Workers from previously disadvantaged backgrounds
• Neighboring communities
• Balanced Scorecard Approach

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Black Economic Empowerment Scorecard Components
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Performance Since Inception
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Jobs and New Shareholders Created
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Beneficiaries(Shareholders/Jobs Created)
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Financial Review
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Portfolio Committees Concerns

• Skewed provincial spread
• Equity share schemes vis-à-vis Mortgage projects
• Beneficiaries capacity building and skills
  development

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Provincial SpreadActual Investments
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Equity Share vis-à-vis Mortgage Schemes
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Capacity Building Skills Development

• Currently conducting skills gap survey on
  projects
• Partnership intervention approach.
• Primary Agriculture Education and Training
  Authority (PAETA)
• Comprehensive Agricultural Support Programme
  (CASP)
• Small Enterprise Development Agency (SEDA)

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Strategic View Way Forward

• Provincial budget allocations
• Organisational partnership approach
• Closer relationship with Provincial DLA offices
  (LRAD)
• Corporate partners e.g. TSB
• RECAPITALISATION
• Co-ordinated and structured capacity building
  approach

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Projected Impact Provincial Spread
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Challenges Faced

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

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THANK YOU QUESTIONS