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JJ Oosthuysen Managing
Director
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The financial year ending 31 March 2003 has certainly been
a good year for NEF with external funding being sourced
and secured. This ensured that a heavily bruised and
embattled NEF survived and was able to implement its
new business model.
NEF was able to restore the confidence of Khula Enterprise
Finance and gain the confidence of the Umsobomvu Youth
Fund. This not only secured funding, but also unlocked
the potential of the new business model, which will greatly
benefit micro enterprises seeking finance.
The following NEF offices were opened during this financial
period:
Braamfontein – Gauteng Provincial Office
Mitchells Plain – Western Cape Provincial Office
In the process of building infrastructure and capacity
to deliver, it is our aim to avoid exposing NEF to runaway
lending by ensuring that proper lending systems and procedures
are in place. This entails developing optimal mechanisms
and management instruments capable of overcoming the
adverse attitude towards repayments that characterises
the markets we serve.
Towards the end of this financial period, the NEF Board
of Directors attended a workshop on good corporate governance
that studied the KING 2 report on corporate governance
principles. At a subsequent directorate meeting, it was
resolved that NEF would implement the principles and
recommendations of KING 2 over the next twelve months.
Sub committees of the NEF Board of Directors, referred
to as Board Committees, have since been appointed do
deal with the various requirements of KING 2.
The accounting policies applied throughout the year
and in preparation of the annual financial statements
for this financial period, conform to South African Standards
of Generally Accepted Accounting Practice.
The auditors, KPMG, performed the annual financial audit
and the annual fact finding audit for the financial period
under review.
NEF has secured adequate loan book capital for the forthcoming
financial period.
NEF is both well placed and structured with a clearly
defined targeted audience, specifically the small and
very small sized business owner or aspiring entrepreneur.
NEF’s focus is crystal clear in terms of its target
market, the delivery of a quality financial service at
an affordable rate and in increasing stakeholder value.
The formation of a legal department to strengthen NEF
collection rates is imminent. The target market demands
a method of collection consistent with its attitude.
As a development lender, NEF has an obligation to develop
and install an understanding of credit management within
our client base.
Loan disbursements were low during the twelve months
under review, but high growth in loan volumes is expected
for the coming financial period. In an effort to become
both competitive and sustainable, NEF has surrounded
itself with a team of professional people to provide
the required services.
NEF is faced with the task of finding the balance between
delivering in terms of its mandate - the provision of
micro finance to small and very small entrepreneurs -
and becoming sustainable as a Micro Finance Institution.
The success of NEF in the year ahead depends on the
following key elements of the operations:
Loan assessment capabilities
Collections when due
Recovery of non-performing loans
Refining the business model
Building management and staff capacity
Risk management
The main challenge will be for management to deliver
in terms of the performance indicators that have been
agreed with the respective funding institutions.
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NEF Board of Directors
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| Chairperson: |
Soraya Solomon |
| Managing Director: |
JJ Oosthuysen |
| Member for Finance: |
George Watson |
| Supervisory Members: |
Mashumi Mzaidume |
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Pele Mavela |
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Mandla Gobingca |
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Wajdi Abrahams |
| Stakeholder Representatives: |
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| Thabo Shenxane |
Umsobomvu Youth Fund |
| Caroline Munsami |
Umsobomvu Youth Fund |
| Ruth Masokoane |
Khula Enterprise Finance |
| Ronald Klotz |
NICRO |
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