1. KHULA ENTERPRISE FINANCE LIMITED 2007 ANNUAL FINANCIAL RESULTS
Presented by Khula Managing Director: Xola Sithole

2. Outline Introduction Highlights Annual Performance Focus for 2007/08
Concluding remarks

3. Highlights
Record business approvals to channel partners of R746 million (60% increase)
Business loan approvals to retail financial intermediaries (R298 million) for the first time exceeded approvals through the credit indemnity product (R266 million)
Disbursements to channel partners increased to R343 million
R100m investment in a reverse factoring product to improve working capital needs of SMEs
Net profit grew by 41% to R31 million
Overall: Excellent progress made in the execution of our growth strategy

4. 2007 PERFORMANCE

5. Delivery Channels and Access Points

6. Key strategic drivers
Deliberate shift to focus on defined target market and quality investments
Better strategic alignment with channel partners
Balance between financial sustainability and development impact
Quality loan book
Leverage existing infrastructure
Balanced product portfolio

7. Business approvals to channel partners
Business approvals up by more than 60%

8. Approvals per product type
Change in product lending patterns

9. Credit Indemnities Taken-up
FY 2007 (Actual)
As at Aug 07 (YTD)
2007/8 (Target)
R’mil %
ABSA
118 49 54
149
FNB 52 21 40 65
Nedbank 39 16 48
Standard 34 14 7 42
Total
243
100
117
304

10. SME client profile Significant increase in disbursements to Black SMEs
Investments in GP/WC/KZN account for 70%
Disbursements to women at 32%
3 558 end-user facilities (ex group loans)

11. Solid Financial Performance
Group net profit of R31 million: 41%
Strong growth of loan book : %
Robust interest revenue from lending operations: %
Significant improvement in property portfolio yield of 16%
Core business commitments at year end totaled R467 million
Investment income up by 16.5%

12. Contributing Factors
Increased wholesale funding to non-banking retail financial intermediaries
Move away from grant-dependent retail financial intermediaries to commercially-driven entities
Formation of effective joint venture partnerships with selected corporate institutions
Introduction of new products
Higher interest rate environment

13. Focus for 2007/8
Grow value of approvals and disbursements to SME financing partners
Grow and diversify property portfolio
Maintain financial sustainability and improve process efficiencies
Raise further funds from the dti to recapitalise Khula to maintain momentum
Seek approval from the dti and Cabinet to lend directly
Reposition the Khula Brand
Increase awareness of Khula and its products

14. Concluding remarks
Renewed focus on SMEs by both the public and private sector
Role of Khula is to bridge the financing gap
The company has built a strong delivery platform to address the challenges of SMEs
The organisation has implemented a number of key strategic interventions to enhance delivery and impact within the constraints of wholesale model
Smart partnerships required to develop innovative products
Khula balance sheet to be strengthened to support growth strategy

15. Siyabonga
Re a leboha
Thank you
Ri a livhuwa