1. KHULA ENTERPRISE FINANCE LTD
BUSINESS PLAN
FINANCIAL YEAR 2005/06
Division : Operations
Business Unit : LREF
Responsible Manager: George Mothoa

2. LREF Business Plan 2005/06 LREF Administrator Helena Scholtz
Accounts Executive
Don Mashele
Business Monitor
Thabo Matolo
Business Manager
George Mothoa
Black – Male
White - Female

4. LREF Business Plan 2005/06
Targets/
Outputs
Activities Necessary to achieve targeted output
Inputs/ Resources Required
Key Performance Indicators
Time Frame and Quarterly milestones
Achieve an even provincial spread. Special emphasis is to increase the LREF investments in the following under-serviced provinces :
Free State
Northern Cape
North West
Mpumalanga
Limpopo
Eastern Cape
Aggressive LREF Marketing and creating awareness in the target provinces.
Development and management of a closer relationship with the different channels with special attention to:
Banks
DFI’s
PDC’s
Private Sector Organisations
Selected National and Provincial departments
Parastatals GM MD
Loan applications from the targeted provinces
1st Quarter
1 project FS
1 project NC
2 projects from any of (LMP, MP, EC, NW, GP)
Total = 4 projects
2nd Quarter
3rd Quarter
1 project from any of (LMP, MP, EC, NW, GP)

5. LREF Business Plan 2005/06 Continued Situation Dec’04 = 52% WC
Targets/
Outputs
Activities Necessary to achieve targeted output
Inputs/ Resources Required
Key Performance Indicators
Time Frame and Quarterly milestones
Continued
Situation Dec’04
= 52% WC
Forecast Mar ’05 = 45% WC
Target Mar ’06
= 40% WC
Identify, align and keep the LREF abreast with provincial economic development initiatives
Consider an interest rate discount (short term) incentive for projects coming from the under-serviced provinces
Engage the DLA Provincial office as well as the Provincial Directors
Closely engage Provincial Tourism and Parks Boards
LREF Management Committee Approval
Intervention and involvement by the DLA and Agric National Offices
DEAT National Offices
Timely response to respective provincial economic development initiatives
Approval by the LREF Management Committee
Buy-in by provincial DLA and DOA offices
Buy-in by provincial DEAT offices
Ongoing
1st quarter

6. LREF Business Plan 2005/06 2. Achieve a balanced Portfolio mix :
Targets/
Outputs
Activities Necessary to achieve targeted output
Inputs/ Resources Required
Key Performance Indicators
Time Frame and Quarterly milestones
2. Achieve a balanced Portfolio mix :
Portfolio mix Mortgage Dec ’04 = 33%
Forecast Mar ’05 = 36%
Target Mar ’ = 46%
Incentivise the channel partners that deliver Mortgage loan applications with a short term (1 year) interest rate discount.
GM Operations
LREF Management Committee
Approval and putting the strategy in operation
End of 1st quarter = 38%
End of 2nd quarter = 40%
End of 3rd Quarter = 42%
End of 4th quarter = 46%

7. LREF Business Plan 2005/06 Required fund > R50m
Targets/
Outputs
Activities Necessary to achieve targeted output
Inputs/ Resources Required
Key Performance Indicators
Time Frame and Quarterly milestones
3. Source new funding :
Required fund > R50m
Sustainable annual disbursement of R49m till 2015
Market the LREF to current and prospective funders.
DOA
DWAF
DEAT
DLA
Khula
Hands-on
Stakeholder Relations Management GM MD
CFO
Additional funding by new funders (and refinancing by current funders)
The facility will be marketed continually
Milestones
R25m 1st quarter
R25m 2nd quarter

8. LREF Business Plan 2005/06 4. Programme Sustainability
Targets/
Outputs
Activities Necessary to achieve targeted output
Inputs/ Resources Required
Key Performance Indicators
Time Frame and Quarterly milestones
4. Programme Sustainability
Review and revise the Facility’s Pricing Structure. Possible areas to consider :
A different pricing structure for each product
A broader pricing continuum
More discount incentive for the Mortgage loan
Introduction of fees
Develop and maintain a provisions policy for LREF.
LREF Management Committee approval
LREF Management Committee
Finance
An approval pricing structure for each product
Approval by LREF Management Committee
Approval by LREF Management Committee
1st quarter
End of 1st quarter

9. LREF Business Plan 2005/06 5. Sustainability of LREF funded projects :
Targets/
Outputs
Activities Necessary to achieve targeted output
Inputs/ Resources Required
Key Performance Indicators
Time Frame and Quarterly milestones
5. Sustainability of LREF funded projects :
Broaden the LREF product and service offering with the addition of a production loan finance product.
Hands-on approach in projects capacity building.
Hands-on and pro- active engagement with relevant SETAS.
Develop a better understanding of the target market (end- user) in order to enable our channel partners to do effective lending.
Intelligence information from other organisations offering a similar product / service.
PAETA
Thuso Mentorship
SEDA
THETA
Marketing provincial DLA, DEAT and Agric
Ability to address the farmers production inputs and other movable asset finance needs.
Effective training & develop capacity of the beneficiaries at the project level
Ability of our channel partners to understand & finance our target market.
Complete production input finance product at end of 1st quarter
4 projects - 1st quarter
4 projects - 2nd quarter
4 projects - 3rd quarter
Review of progress in all 12 projects – 4th quarter

10. Notes to the income statement / budget
Remuneration expense = 15% of annual payroll
Consultation fee = Allocation for the payment of service providers ( training) on LERF funded projects ( at least 10 projects to start with training)
Cell phone allowance = Allowance for 3 staff members (Manager, Accounts Executive and Monitor)
Agency fee = Amount DLA pays Khula for the administration of the LREF at 3% of initial capitalisation
March ’07 and March ’8 budgets are an escalation of 5% from March ’06
March ’05 forecast figures = Actual at 31 Dec’04 x 12 months
9 months
March ’06 budget = March 05 forecast x current inflation ( 5% ) except for remuneration expense which is 25% of departmental annual payroll.

11. Notes to the income statement / budget
Remuneration expense = 15% of annual payroll
Consultation fee = Allocation for the payment of service providers ( training) on LERF funded projects ( at least 10 projects to start with training)
Cell phone allowance = Allowance for 3 staff members (Manager, Accounts Executive and Monitor)
Agency fee = Amount DLA pays Khula for the administration of the LREF at 3% of initial capitalisation
March ’07 and March ’8 budgets are an escalation of 5% from March ’06
March ’05 forecast figures = Actual at 31 Dec’04 x 12 months
9 months
March ’06 budget = March 05 forecast x current inflation ( 5% ) except for remuneration expense which is 25% of departmental annual payroll.