10/14/11 Briefing on the Annual Report 2011 TO THE PARLIAMENTARY PORTFOLIO COMMITTEE ON HUMAN SETTLEMENTS 12 OCTOBER 2011 Cape Town Presented by: Jabulani Fakazi & Hennie Potgieter

10/14/11 Outline  Key Points  Business Environment  Impact Performance 31 March 2011  Financial Performance Year Ending 31 March 2011  Concluding Remarks

10/14/11 Annual Report 2011 Key points  Unqualified Audit Report from External Auditors – every year since inception  Internal Auditors found control environment acceptable and adequate  RHLF complied with all legislative and regulatory provisions  RHLF reported a surplus of R18,2 million vs. Budget of R2,8 million  RHLF Disbursed R224.4 million vs. Budget of R202.2 million  Received R49,5 Million Grant Funding

10/14/11 Annual Report 2011 Business Environment External factors affecting RHLF:  South African economy  Unemployment – high level of unemployment in RHLF target market  CPI – direct and indirect inflation effect on disposable income  Slow recovery of world economy & effect on domestic economy  Over Indebtedness – between 75% and 80%  Low Interest Rates – benefit not to end users  Liquidity Crunch Effect on RHLF:  High Levels of Consolidations  Increased Competition  Collection rates under pressure / Bad debt provisioning high  Intermediaries still limiting new business – high rejection rates  Higher risk of leakage

10/14/11 Financial performance year ending 31 March 2011 Key Performance – Actual vs. Budget

10/14/11 Impact performance: Disbursements Cumulative cash disbursements since 1996: R 852,301 million

10/14/11 Impact performance 31 March 2011

10/14/11 Impact performance: No. of loans Target for 2011: 44,933 Achieved: 40,289 Average Loan size R 5,568 vs. budget of R4,500 Total Loans past 7 years: 208,925

10/14/11 Impact performance: Loan Usage Target for 2011: 80% for “Housing” Achieved: 85% 85%

10/14/11 Impact performance: Income Levels Target for 2011: 65% to households earning R3500 or less pm Achieved:53% to households earning R3500 or less pm Large number of small loans Ave below R2000

10/14/11 Impact performance: Employment

10/14/11 Impact performance: Gender Split

10/14/11 Impact performance: Provincial Distribution Target for 2011: 80% outside Metro’s Achieved :85% outside Metro’s

10/14/11 Impact performance: Provincial Distribution

10/14/11 Impact performance: Presidential Rural Nodes

10/14/11 Financial performance: Interest Income Average Interest rate earned 13.6%

10/14/11 Financial performance: Operating Cost

10/14/11 Financial performance: Operating Cost

10/14/11 Financial performance: Operating Cost Increases: Consulting fees increase: Independent review of impact information reported by intermediaries Directors fees: 5 new directors appointed in Oct filling the vacancies on the board and various committees Donations: R49k to “Rally to Read” and R6,7k to Woman Build General admin: increases in bank charges, insurance and staff training Legal Fees: legal advise on restructuring of poor performing intermediary Operating lease: annual increase per rental agreement. Staff Cost: 2009/2010 the CEO position was vacant the COO acted in that capacity. CEO position filled in September RHLF also appointed two new full time employees( jnr. Marketing Consultant and jnr. Risk Analyst) and an intern (Client Executive). Rest of the staff received an inflation based increase. Travel cost: increase in flights to Cape Town Savings: Office Expenses: General savings achieved.

10/14/11 Financial performance: Loan Book

10/14/11 Financial performance: Impairment Provision

10/14/11 Financial performance: Surplus after Tax Target for 2011: R2,849 million Achieved:R18,251 million Note: 2010 included a once off profit on sale of Investment of R17,8 million. Adjusting for that the R11,2 million

10/14/11 RHLF Employee Profile

10/14/11 RHLF Board of Directors

10/14/11 Concluding Remarks  Overall, RHLF achieved satisfactory results in 2011 under tough market conditions  2011/12 Outlook remains gloom:  Slow recovery of the economy  No recovery of jobs lost in the previous years  Indebtedness levels in our target market remain high  RHLF remains focused on ensuring that current FY targets are achieved—but it will be tough! Thank You