Building vibrant and sustainable co-operative enterprises that stimulate the social economy of the province



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SERVICES OFFERED BY SOUTH AFRICAN MICRO-FINANCE APEX FUND(SAMAF)


Mr Lungile Phillips

Background

  • SAMAF is a pro-poor developmental credit wholesale fund.

  • It seeks to reach out broader and deeper to the enterprising and working poor in the rural and the peri-urban settlements of South Africa.

  • It identifies, selects, evaluates and supports community base financial intermediaries.

  • The fund offers 4 products which include Savings Formalisation, Savings Mobilisation, Credit Fund and Capacity Building Fund.

  • The Fund is governed by the legislative environment of South Africa relevant to the Developmental Financial Institutions.

Mandate

SAMAF mandate is to provide on-lending funds and supports capacity building of the Financial Intermediaries (FI’s) that are deeply rooted in the rural and the peri-urban communities, which are controlled and governed by such communities, thus contributing to the reduction of poverty and unemployment.



Vision

To be a leader in the field of Developmental Micro finance and support the development of best practice models in South Africa.



Mission

To provide Developmental Micro Finance services by going deeper and broader to the target market through a network of community based financial intermediaries.



Values

Integrity, Transparency, Professionalism, Accountability, High Performance.



Action Guide for FSC Registration

Organisations that meet requirement 1, 2, 3 and 4 below can contact SAMAF offices for assistance.



All FSC registrations are done through SAMAF. This means interested parties must contact the SAMAF Provincial Office for guidance.SAMAF Provincial Offices can be contacted for enquiries during weekdays (Monday – Friday).

Requirements

Financial Services Co-operatives - FSC’s

  • Must be engaged in Financial Services (Savings and credit/loans).

  • Must have been operating at least for twelve months (as trading entity, Umgalelo, or Stokvel with members saving and loaning).

  • Must be involved in both savings and on-lending/credit activities.

  • Must be compliant with the Co-operative Act and NCA.




  • Compliant with the deposit taking legislation as per SAMAF regulation.

  • Must adhere to the Co-operative Principles and the FSC Constitution.

  • Must have a fully functioning committee/board.

  • Must have records of the FSC/Organisation.

  • Must have most recent bank statement, monthly contributions, monthly loan repayments and member list.

IMVABA CO-OPERATIVES FUND-UPDATE


Mr Thabo Shenxane
Mortality / Survival Rate of co-ops: CIPRO 2010




Membership turnover of co-ops in EC (DEDEA 2008)



Background to Imvaba Co-operatives Fund

  • Provincial Co-operatives Strategy adopted in 2009.

  • Strategy informed by a detailed Baseline Survey conducted in 2008.

  • R150 million committed by Provincial Legislature in 2009 to implement the Strategy adopted in 2009.

  • Imvaba launched in March 2010 through a Road show in the province.

  • ECDC appointed by DEDEA in April 2010 to administer the Funds.

  • A total of R102.6 million transferred to ECDC end of 2010:

  • R14 million for Co-operative Development Centres.

  • R16 million for the Institute of Co-operatives in Fort Hare (SLA with DEDEA).

  • R72.6 million for Imvaba in 2010/2011.

  • End of March 2011, ECDC already committed R 24 million.



  • R64 million committed in 2011/2012 to create a Fund that supports co-operatives.

  • Governance of the Fund:

    • A specific Funding Policy, Funding Committee, Criteria and Guidelines within the ECDC.

  • Application Processes for the Fund:

  • Applications are received, assessed against criteria, due diligence and site visit conducted, Funding Committee Submission developed and presented in the Funding Committee that then makes a decision.

  • Mentorship and Technical Skills Training:

    • All co-operatives approved for funding are entered into an intensive technical skills and training programme in order to enhance the skills of members.

Services needed by co-ops in EC – Order of Priority!



Responding to needs above: allocation of funds

Technical Skills and Mentorship – R4.5 million



  • Providing access to technical skills training, access to markets and mentorship on bookkeeping and administration.

Governance Training – R4.5 million

  • Assisting members of co-operatives in understanding their constitutions and enhancing compliance with the requirements of the Co-operatives Act No 14 of 2005.

  • Term Loans – R40 million

  • Long term loans, linked to prime and repayable over a period of up to 5 years.

Seed Capital – R10 million

  • Purchasing of basic equipment, certification for quality and standards in order to enhance competitiveness.

Marketing and Communications – R4 million

Progress on the use of funds to date

  • 42 Co-operatives have been approved funding under the Co-operatives Fund since Nov 2010 – Oct 2011.

  • R26 million has been committed for Term Loans to the approved co-operatives (Nov 2010 – Oct 2011).

  • R1.8 million has already been committed to Technical Skills Improvement of Agricultural Co-operatives (R1.4 million spent).

  • R800 000 committed to Quality Improvement of Products of Co-operatives (SABS – 22 November 2011 signing an Agreement).

Approved Agricultural Co-operatives include:

  • Piggery Producers – slaughtering, packaging and selling to the market (local supermarkets).

  • Vegetable and Crop Producers – planting, packaging and selling to the market (local supermarkets).



  • Poultry Producers – growing, slaughtering, packaging and selling to the market (local supermarkets).

  • Dairy Producing – milking, packaging and market (local supermarkets).

Approved Manufacturing Co-operatives include:

  • Brickmaking co-operatives – producing and selling to local contractors.

  • School Furniture – making desks and chairs for local schools.

  • Bread making – baking bread and selling within communities, local supermarkets and other spaza shops.

  • Sewing and textile – mainly producing uniforms for schools.

  • Honey Production – harvesting honey directly from bees, packaging it and selling to local supermarkets.

These 42 Co-operatives are creating new jobs for approximately 674 people within their communities, over and above about 210 founding members that are also working in the co-operatives. ECDC implements proper credit guidelines in granting loans guided by the policy signed by DEDEA and ECDC.

Spatial Distribution of funded co-operatives



Economic Distribution of funded co-operatives



Remaining Challenges

  • Consistent infighting of members – frustrating governance.

  • Dominant personalities within co-operatives who “bully” other members.

  • Government officials personally establishing co-operatives thereby contradicting the principle of “autonomy and independence” of co-operatives.

  • Lack of commitment of government to procuring from co-operatives on a consistent basis.

  • Access to mentorship activities for co-operatives remains minimal (bookkeeping, technical training and branding).

  • Access to governance training (Act of 2005).

  • Lack of understanding of the constitutions by members.



  • The quality of products by co-operatives remains poor.

  • Lack of access to auditing services results in co-operatives not complying with Section 47 of the Co-operatives Act of 2005.

What next for the ECDC


ECDC will be signing formal Memorandum of Agreement with the SABS

  • Quality Assessment of co-operatives products.

  • Training and Certification (SABS stamp on products).

  • Improved market access.

ECDC needs to engage Fruit & Veg, Spar, Pick ‘n Pay, Shoprite, Boxer, etc.

  • Supply vegetables.

  • Supply chickens and pork meat.

  • Supply honey.

ECDC to engage Dept. of Health, Education, Clothing stores, etc

  • Supply of school uniforms, hospital linen, pyjamas, other garments.

Government procurement sector.

  • These efforts are to improve access to markets whilst improving product quality for co-operatives.

ECDC will now introduce bookkeeping.

Technical Skills Training

  • During the month of September 2011, Fort Cox College designed and conducted training to all the 16 Agricultural Co-operatives funded by Imvaba Fund.



  • A total of 59 members from 16 Co-operatives were incubated at Fort Cox College for a month of September 2011 and taught Best Practice in the production of Agricultural Products.

  • A specific Training Module on Occupational Health and Safety was also conducted.

  • First Aid Training and First Aid Kits were also provided by St Johns Ambulance for the 16 Agricultural Co-operatives.

  • All the co-operatives were also trained in Nursery Management, Farm Business Management, Bookkeeping and Record Keeping.

Broiler Production

  • Ideal housing structures for chickens (roof, ventilation, lighting, drinkers, feeding space and feeding basins).

  • Management of the day old chicks.

  • Biosecurity Programme for the poultry farm.

  • House Preparation and Management.

  • Feeding Management (Starter, Grower, Finisher and Post finisher).

  • Health and Disease Management Programme (causes, prevention and treatment).

  • Health and safety issues in broiler production.

Crop and Vegetable Production

  • Soil Requirements.

  • Nutrient and Climatic Requirements.

  • Seedbed Preparation.

  • Planting and Fertilisers.

  • Weed control, Pest and Diseases.

  • Irrigation/ Water Requirements.

  • Harvesting.

Piggery Production

  • Ideal housing structures for pigs (Walls, Floors, Drainage, Roof, Ventilation, Light, Drinkers and Feeding space and feeding basins).

  • Types of Pens for Pigs (Furrow Pens, Boar pens, Mating Pens, Dry Sow Pens and Gilt Pens/ Growing Pens).

  • Improved Modern Breeds (Selection of Sows, Selection of Boars and Mating).

  • Feeding Management (Feeding Chuffs, Commercial Rations, Eating Plan, Lactation).

  • Care of Piglets before and after Weaning.

Farm Business Management

  • Bookkeeping.

  • Record Keeping.

  • Tractor Maintenance.

  • Caring for Implements.

Occupational Health and Safety

  • Improving on site working environments for members (fire extinguishers, etc), including Personal Protective Clothing.

  • First Aid Training and Kits.

Mentorship and Market Access

  • This phase resumes from November 2011 to March 2012.

  • Mentorship in this phase will include the following for each of the 16 Agricultural Co-operatives trained:

  • Developing and Implementing Cropping and Production Plans for all the crop and vegetable producing co-operatives.



  • Developing and implementing poultry growing system within all the poultry producing co-operatives.

  • Implementing the Dairy Management Plan for dairy producing co-operatives.

  • Assist all these co-operatives to Access Markets where the products will be sold (Fruit & Veg, Spar, etc.).

  • Assist all Co-operatives with Harvesting and Packaging Techniques of their produce.

  • Assist all the Co-operatives with Financial Management when the Co-operative and ensure that there is discipline to Pay Bills First and also save money in order to grow the co-operative.

  • Institutionalise Financial Management, Safety Plans, Governance Systems within co-operatives.

  • The ECDC is engaging the SABS to assist with product Certification and Standards setting.

Long-term vision

  • ECDC seeks to ensure the loans are repaid.

  • Co-operatives sustain jobs that they create.

  • Co-operatives conduct business in a sustainable manner.

  • Co-operatives grow their businesses by supplying the right quality products on time, all the time.

Qualifying Criteria for the Co-operatives Fund

The following criteria need to be satisfied in full in order for an application to be considered under Imvaba Co-operative Fund:



  • A Registered Co-operative under the Act No 14 of 2005;

  • A formal business plan;

  • A fully completed application form;

  • Resolution by members to apply for the funds;



  • Certified copy of the Registration Certificate signed by the Registrar;

  • Certified copies of the Constitution of the co-operative;

  • Certified ID copies of the founding members;

  • Tax Clearance Certificate of the Co-operative;

  • Proof of Bank Account;

  • Short CV’s of founding members;

  • Lease Agreements (where applicable);

  • Letters of intent from the potential market for the products


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