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Cadiz Enterprise Development · PDF fileT + 27 8000 CADIZ (22349) | E [email protected] The Cadiz Enterprise Development Investment ... The Cadiz Enterprise Development

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  • Cadiz Enterprise Development InvestmentImpact Report to December 2014

    assist corporates with Preferential Procurement. We have then added a Supplier Development Fund in addition to our existing Enterprise Devlopment Fund. Enterprise & Supplier Development is a Priority Element in the Amended Codes and counts up to 40% of the Scorecard.

    We are proud to update you on the progress of your enterprise development investment. From the report, compiled and verified by GreaterCapital, you will be able to see first-hand what an impact your investment is making on South Africa.

    We believe that we are adding significant benefit to all parties. To you as our clients we deliver a professional solution with full transparency and compliance with all regulations. To our black investors we deliver a financial lifeline which would otherwise be denied to them. To South Africa we collectively deliver economic empowerment exactly what the Codes of Good Practice intend.

    Thank you for your ongoing support.

    CENT making sure every cent

    counts

    Page 1 of 12

    For further information please contact your financial adviser or Investor Services T + 27 8000 CADIZ (22349) | E [email protected]

    The Cadiz Enterprise Development Investment (CENT) (including the ICT Enterprise Development Investment) has, since its inception in November 2012, raised almost R100 million from over 250 corporate investors.

    Investors into CENT have recognised that a specialist investment skill set, applied by informed and experienced professionals, can transform an annual Enterprise Development expense into a once-off asset on their balance sheet. This creates a valuable pool of capital from which Black-owned businesses can source much needed stable and affordable loan funding.

    Recent EnhancementsNot only have we enhanced CENT for construction companies by adding an Enterprise Development Program, but we have also developed a solution to Enterprise and Supplier Development required in terms of the Amended Codes of Good Practice which also may

  • Page 2 of 13

    Affordable housing units

    446178People housed in these units

    Our initiatives have created an additional

    3,600* jobs& suppported the development of

    2,439 SMEs

    SMEs supported through finance or equipment leasing

    The number of first time households with waste collection services

    Number of people receiving computer training

    998

    Impact at a glance

    As at 31 December 2014 CENT has delivered the following impact:

    * Of these, 2,547 are a direct result of CENTs lending, while another 1,026 jobs have been created indirectly

    99

    99%

    93%

  • Page 3 of 13

    Impact at a glance

    The Cadiz Enterprise Development Investment (CENT) invests into Black owned businesses that help to address some of South Africas most intractable social problems. These include a lack of decent housing and access to basic services, poor transport infrastructure and linkages to areas of economic opportunity, and high rates of unemployment.

    Amongst others, entrepreneurs and SME owners supported by the Fund include property entrepreneurs in neglected inner city areas and informal traders who need access to capital to grow their businesses.

    These investments have supported job opportunities for entrepreneurs in small and micro businesses as well as in the construction and waste management sector. In total, since inception CENT has created an additional 3,600 jobs. Of these, 2,574 are a direct result of CENTs lending, while another 1026 jobs have been created indirectly.1

    Affordable housing Working capital for SMEs

    ICT

    Transport

    12%

    SME microfinance

    22%

    Waste management

    3%24% 23% 13%

    Investments by sector

    1 Throughout this report, direct jobs refers to jobs created either in investee organisations or, where applicable, in organisations that they lend to directly. Indirect jobs are those that are created outside of these organisations, usually as external contractors or suppliers. This method of reporting is consistently used internationally, and is also specifically envisaged by the B-BBEE Codes of Good Practice which allow for the use of 3rd parties to execute your Enterprise Development initiatives.

    Industrial

    3%

  • Page 4 of 13

    2 426 2 426 2 206 2 206SME microfinance

    23 35 2 3Waste management

    JOBS

    SUPPORTED

    ENTREPENEURS SUPPORTED

    Current

    Current

    Since inception

    Since inception

    444

    0

    0444

    0

    0Affordable housing

    9 9Working capital for SMEs

    89 89 31 99Information and commumunication technology

    3 589 3 600 2 370 2 439TOTAL

    604 604 121 121Transport

    SME microfinance has been a particularly effective way to support micro-entrepreneurs, particularly in rural areas where there is little opportunity to find formal employment.

    CENT investees have a presence in all nine provinces of South Africa, delivering positive social impact in every corner of the country. The provinces with the highest populations (Gauteng and Western Cape) account for the biggest share of invested capital.

    2 2 1 1Industrial

    This report provides an overview of each of the high impact investment sectors and the change that is being realised through CENT.

    8%

    0%

    5%

    1%

    14%

    47%

    11%

    4%

    10%

    Spread of Enterprise Development Investments

  • Transport

    Core indicatorsCURRENT

    SINCE INCEPTION

    Entrepreneurs supported: of whom black of whom women

    12112121

    12112121

    Jobs created for taxi drivers and assistants

    121 121

    Indirect jobs created 483 483

    Geographic spread of clients

    The public transport sector is particularly challenging in South Africa as a result of the spatial development anomalies inherited from the apartheid policy of the previous government. Low income earners are forced to commute long distances (with longer travel times) for educational, social and economic purpose at a greater cost than what would have been usual in a more normal spatial development pattern. This places a severe burden on the work-force of the economy and acts as a significant constraint to the economic development of South Africa.

    The majority of South Africans still rely on public transport and the taxi industry is the most widely-used mode of public transport. Approximately 69% of South Africans use mini-bus taxis for their daily commute; with use highest in the more rural provinces2.The public sector also presents a strong opportunity for employment creation and economic development. As it stands, the minibus taxi industry generates an estimated R3 billion in revenue per year and employs approximately 300,000 people3.

    The taxi industry creates jobs both directly and indirectly. Taxi drivers and their assistants are directly employed, while an estimated 95 indirect jobs are created. These jobs include taxi marshals, taxi association employees, mechanics, car washers, mechanics, panel beaters and informal traders.

    CENT funds taxis that are compliant with the governments taxi recapitalisation project, which strongly emphasises vehicle safety.

    8%

    3%

    7%

    3%

    9%

    33%

    10%

    6%

    22%

    The taxi industry creates

    jobs both directly and indirectly. Taxi drivers and their assistants are directly employed, while indirectly

    taxi marshals, taxi association employees, mechanics, car washers, mechanics, panel

    beaters and informal traders all rely on the for their

    income.

    Page 5 of 13

    2 National Transport Survey 2013. Statistics South Africa. Figure 9.6. http://beta2.statssa.gov.za/publications/P0320/P03202013.pdf

    3 http://www.moneyweb.co.za/moneyweb-economic-trends/sas-r398bn- taxi-industry.

  • SME Microfinance

    Core indicatorsCURRENT

    SINCE INCEPTION

    SME owners supported of whom black of whom women

    2,2062,2062,184

    2,2062,2062,184

    Individuals employed by SMEs

    2,426 2,426

    Dependants of loan recipients

    11,911 11,911

    Geographic spread of clients

    The Grameen Banking model, developed by Professor Muhammad Yunus, offers credit and group-savings schemes to people living in poverty. With the small loans they offer, and the support networks they create, microfinance providers have become a major global developmental force.

    CENTs SME microfinance investment targets the poor, and as the figure below shows, all first loan clients are consistently poorer than the general African/Black & Coloured population4.

    These loans are invested into small businesses, which create a source of income for the client.

    The vast majority of clients will take out a second loan once they have paid off their first loan. As clients take out bigger loans over time the value of their businesses and the amount that they are saving every month also increases with each loan cycle. As clients businesses grow, their income increases. Many become a source of employment for other people in their community.

    While this investee does not take deposits, it trains its clients on how to open a bank account and emphasizes the importance of accumulating a savings safety net. At the end of December 2014 this investees clients had accumulated a total of R 41 million in savings.

    Percentage of microfinance clients vs African/Black population living in poverty

    4 Statistics South Africa (2007a) estimates the food poverty line at R9.10/person/day based on the 2001 South Africa Income & Expenditure Survey and a per-person, per-day standard of 2261 kilocalories.

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