1. BUSINESS PARTNERS LIMITED South Africa ’ s leading investor in SMEs SME Finance Workshop 26-27 June 2007 Dares Salaam, Tanzania Paul Malherbe COO: Technical Assistance, Mentorship & Consulting Service Business Partners Ltd

2. Who was Business Partners in 1981?  Small Business Development Corporation  Joint Venture between Government & Private sector  Capital base of US$20million  Focus on small business / entrepreneur development in SA

3. Who is Business Partners in 2007?  Unlisted public company and ISO 9001:2000 certified  Invests in viable formal SME’s requiring between US$50 000 and $2,5million  Invested more than $1billion in 30 900 entrepreneurs in 26 years  23 offices throughout South Africa  2 International offices:  Antananarivo, Madagascar  Nairobi, Kenya  Expansion across Africa using the successful Business Partners model

4. Business Partners’ 2007 Highlights  Investment portfolio of approximately US$210million  Achieved net profit after tax of $22,5m  664 investments totaling $125m approved for the year  Created in excess of 7 780 jobs in formal economy  Properties under management of 682 000m ² and 3 475 tenants  521 Mentors completed 699 value adding assignments to SMEs

5. Business Partners’ Investment portfolio 2007  Investment portfolio of US$210million  Current base consist of ±3 000 clients  Net bad debts written off amounted to $950 000  Arrear investments at 11%, portfolio at risk at 1,60%  74 investment exits were done during 2007

6. Business Partners’ product offering  Structured loan funding  Pure equity funding  Quasi Equity with structured repayment  Sharing of profit with entrepreneur  Technical Assistance & Mentorship to assist entrepreneurs Project viability, Entrepreneur assessment, collateral available and own contribution determines funding structure

7. Business Partners’ risk financing model  Financing based on viability not collateral – extensive due diligence  Equity participation for “ fair deal ” (entrepreneur and BPL)  Post Investment management – investment team and mentors  Operational teams add value through ongoing support

8. Business Partners’ 5 ingredients for success 1Sector Specific knowledge  Expert database of SME sectors & industry norms  Industry Information base  Deal directory This enables Business Partners to structure investments based on profitability of the business and not on collateral

9. Business Partners’ 5 ingredients for success 2Efficient processing  Deal flow review process  Streamlined due diligence – evaluation documents; task lists  In-house implementation and legal teams  Standardised legal documents Operational teams have a target of 1 deal per month per investment officer and can only achieve this through efficient processing

10. Business Partners’ 5 ingredients for success 3Unique product structures  Basic investment products: Pure Equity Risk based loan investments (Shareholding) Royalty based loan investment (No shareholding) Combination of Risk and Royalty Property investment transactions

11. Business Partners’ 5 ingredients for success 4Integrated Technical Assistance  Business Partners evaluates each entrepreneur for – Technical skills Business skills  Entrepreneurs required to work with mentors in their ventures  Aim is to improve value-added and profitability  Cost of mentorship shared

12. Business Partners’ 5 ingredients for success 5Alignment of interests  All operational staff assessed ito a Performance Scorecard  This is aligned with various factors of importance for the Company  Individual remuneration tied to Company performance  Innovative merit incentives – Carried interest scheme Employee share scheme

13.  Agreements with 521 Independent Mentors as service providers  “ Mentors ” are retired business / professional people available to SME entrepreneurs  Business Partners manages the process – evaluate quality and value added to SME ’ s  699 projects completed in FY07 Technical Assistance: Business Partners Mentors

14.  Business Partners vision & mission encapsulates Value Adding  Assessment of entrepreneur determines TA level  Post investment management team involved in Value Adding  TA not only for own clients – manage TA funds for other parties Technical Assistance as part of Strategy

15. Business Partners outside South Africa: Key elements for BPI  Leverage off Business Partners ’ processes, systems and knowledge  Uses Business Partners ’ funding model with integrated TA  Working relationship with IFC  Focus on Sub-Saharan Africa

16. Business Partners outside South Africa: Key elements for BPI  1 st Fund: Madagascar –  $10million plus $2m TA  Malagasy & International investors  Aims to invest in 120 businesses over 5 years  Gender & Indigenous investee targets  2 nd Fund: Kenya –  $14,1million plus $2,5m TA  Kenyan & International investors  Aims to invest in 180 businesses over 5 years  Gender & Indigenous investee targets  3 rd Fund – Country being investigated

17. Thank You Business Partners Limited (An unlisted public company incorporated in South Africa) 5 Wellington Road Parktown, 2193 Johannesburg, ZA 00 (0)11 480 8700 pmalherbe@businesspartners.co.za