ANNUAL REPORT 2004 A NEW DAWN FOR HOUSING FINANCE
CCONTENTS Introducing the Kuyasa Fund 3 Chairman s report 6 Executive Director s report 8 Staff and board 10 Positioning Kuyasa 12 Our programme of work 17 Delivering value 19 Future challenges 22 Financial information 23 Contact details For further information about Kuyasa, please contact: Olivia van Rooyen Executive Director 3 Wrench Road, Observatory Cape Town 7925 Telephone: +27 (0)21 4483144 Fax: +27 (0)21 4473140 E-mail: olivia@kuyasa.org.za Or visit our website: www.thekuyasafund.co.za The Kuyasa Fund is an association not for gain incorporated under Section 21 Registration Number: 99/2187508 The Kuyasa Fund is registered in terms of the Non-profit Organisations Act Registration Number: 103-880 NPO 1
Vision Kuyasa aims to create sustainable households and communities. We do this through facilitating access IIntroducing the Kuyasa Fund to housing finance as a tool for improving well-being and supporting the development of a financial sector for the poor. We believe that the poorest of the poor are credit-worthy, and that through mobilising savings they are able to build financial and social capital. The Kuyasa Fund is a non profit organisation which uses microfinance as a tool to improve housing conditions for poor people in the Western Cape by supporting community groups to save towards housing and by granting loans to individuals qualifying for the government housing subsidy. Our clients are mostly women in informal employment with household incomes of less than R3 500 per month; 60% of our clients earn less than R1 500 per month. By combining savings, loans and the government subsidy, houses built in our projects average 60m 2, almost doubling the subsidy housing norm. Key objectives Mission Statement In order to meet our vision, Kuyasa provides microfinance services to those with secure occupational rights who are excluded from formal finance, because improving the quality of housing adds essential social value and because no other appropriate sources of housing finance are available to low-income households. To provide responsible access to credit to those outside the formal banking sector, particularly to traditionally vulnerable groups including women and the elderly. To support this access to credit through promoting saving groups and regular repayment. To provide credit with the aim of improving housing and building social capital. To enable clients to build adequately sized houses that meet their needs. To provide an example of successful lending to the financially marginalised and to pioneer a methodology for finding sustainable solutions to poverty. 2 3
Our development milestones 2000 Kuyasa grants its first loan in December 1999 to Khayelitsha resident Rose Siyanga Three staff members 2001 First major strategic expansion plan put in place Kuyasa expands loan base beyond DAG projects Six staff members Total no of loans: 169 Total value of loans: R521 384 First repayment of a Kuyasa loan 2002 Public launch celebration of Kuyasa with clients Eight staff members Total no of loans: 358 Total value of loans: R1 373 500 2003 Kuyasa moves out of DAG offices into its own premises Kuyasa becomes independent of DAG, establishing a separate board Twelve staff members Total no of loans: 574 Total value of loans: R2 290 099 2004 Kuyasa initiates engagment with banks regarding partnership to increase impact at lowest end of housing market Staff increases to eighteen Total no of loans: 970 Total value of loans: R4 374 984 5
CCHAIRMAN S REPORT As Kuyasa completes its fourth year of operations it looks back on the successful consolidation of its business model for the provision of housing and housing improvement micro loans to communities that have traditionally been marginalised by the formal financial service providers. Our model focuses on providing a financial service that is affordable to its users, maintains a close relationship with them throughout the life of loan agreements, stimulates and rewards a culture of savings and payment for services and seeks to achieve the delivery of a socially beneficial service that is efficient and cost effective. Apart from the immediate benefit of the aesthetic, functional and (in some instances) sanitary improvement to their living conditions, and through providing a bulwark against the degradation of our peri-urban townships, there are a host of indirect benefits to users. These include improvement in the value of homes, the creation of home environments that are conducive to learning and studying and the creation of social capital within communities. We attribute these successes to: are inappropriate and ineffective, all of which have contributed to the acknowledged failure of housing delivery to date. It is therefore truly remarkable that despite these challenges, Kuyasa s clients and employees have once again delivered a year of remarkable performance for the organisation. The product of Kuyasa s strategic planning conducted during the year under review should see the organisation: Continuous education among our users and commitment by them to honour debt repayment in order that the network effects of our model be realised for more people within our target market. The greater the percentage of users who honour their debt, the greater the number of people our service can reach and the better our ability to provide repeat loans to existing lenders; Aggressive management of the efficiency of our use of wholesale funding in order that we progress towards economies of scale; A dedicated team of employees who understand our business model, subscribe to our organisation s performance measurement systems and take pride in the range of social needs serviced by our product offering; The fact that women feature strongly in our business model both as users (and therefore, payers of debt) and as employees and administrators; The co-operation with and support by research analysts and partners who are active in lobbying for the provision of affordable, sustainable and credible shelter, housing, and finance for the poor; The continuous evaluation of our business model and the strategic challenges and advantages of the environment in which we operate; The operational and executive leadership provided by our executive director, Olivia van Rooyen. The delivery of affordable housing remains one of the most profound challenges of our young democracy. Despite renewed enthusiasm at all levels of government to deliver on undertakings to address this challenge, we as an organisation that has been actively pursuing solutions have witnessed a plethora of bureaucratic failures, resource and capacity challenges, underspent housing budgets, policy uncertainty and inertia, and wholesale lending models to our service sector that Enhancing our performance as a lender and our efficiency and cost recovery in order that we are able to replicate our model both in volume of users and geographical scale, possibly through a pilot scheme by: Improving management information systems and, if possible, achieve a seamless integration into the existing MIS systems of a major bank to ensure even better and more accessible service delivery to our users, Establishing more formalised skills development programmes for our employees and more accurately tracked and targeted performance management systems for employees; Implementing a management capacity building and succession programme. Seeking more aggressive participation in our sector networks to lobby for improvements in government s housing delivery mechanisms and procedures; Actively seeking out new and cheaper sources of wholesale funding that facilitate the blending of our funds, our achievement of economies of scale and accelerate our achievement of complete self-sustainability; Actively pursuing partnerships with provincial and local government and private sector developers, whilst managing our engagement of contractor risks; Considering the extension of our service offering beyond the housing-specific sector, (only if and once specific performance and cost recovery targets have been reached) and moving towards the achievement of economies of scope; Engaging with financial institutions to facilitate their implementation of the Financial Services Charter and our achievement of our strategic objective to replicate our model. Brent Williams Chairman of the Board 6 7
EExecutive director s REPORT The Kuyasa Fund at just four years of age is a relatively young organisation. But in the short time that we have been active, we can look back on a history marked by much hard work and the attainment of some important milestones. The aim of this, our first Annual Report, is to provide an overview of our organisation and its achievements since it was established in 1999, and in particular to focus on our activities over the past year. The Kuyasa Fund was established by the Development Action Group (DAG) in 1999 out of a need to find alternatives to methods available to the poor for accessing housing loans. The catalyst for Kuyasa s formation was the strong belief that the government housing subsidy scheme offers people a mechanism to invest in housing through savings and loans, and provides an opportunity to improve housing. In 1999, DAG laid the foundation for the loan scheme by encouraging the formation of savings groups in projects it administered. The first Kuyasa loan was granted in December 1999, and full scale lending started in February 2000. By September 2004, the Kuyasa Fund had granted 2 643 loans totalling R11.6 million across the Cape Metropolitan Area and impacting on approximately 13, 200 individuals, given our clients average household size of five people. By demonstrating that the low-income population is not homogenous, and that many of the poor can both afford and manage loans, the Kuyasa Fund is helping people to gain greater access to housing and providing them with opportunities to build long term social and financial equity. With the creation of a successful finance model, Kuyasa also has an meaningful contribution to make to the wider debate in South Africa over the ways in which the formal finance sector can extend its services to the unbanked. The Financial Services Charter represents an opportunity for the two economies of the financial services industry to merge. The ideal outcome would be for Kuyasa to develop a response to the charter that enables it to use the FSC as an opportunity to leverage resources into the communities it works with and to expand the scale and impact of its work. 2004 marks a year of consolidation after rapid growth in our first years. As we have grown in capacity, our organisation has had to grow in order to keep up with our loan portfolio. To this end, Kuyasa moved into new premises in 2003, and our staff has grown from the original three to eighteen. The past four years have provided much success, but also valuable lessons learned. The Kuyasa model of finance provision has become a flexible tool through necessity, as each new community has brought different requirements. Our methods are constantly evolving in response to and anticipation of the needs of the communities we service. Our high repayment rate is a direct consequence of the strong emphasis we have placed on relationship building with clients and the constant presence of our staff in the field. We have also had to adapt our operational side, as the rapid growth in both staff and clients has required more sophisticated information management. That we have been able to adapt and grow successfully over so short a period of time is a positive indicator that our organisation has the strength to meet further challenges in the year ahead. Olivia van Rooyen Executive Director 8 9
SStaff and board THE KUYASA TEAM BOARD OF DIRECTORS EXECUTIVE DIRECTOR OPERATIONS MANAGER The board determines organisational policy and strategic direction, approves our annual operating budget and contractual obligations and meets quarterly, as well as at AGM and extraordinary meetings. The executive director has executive authority over all operations; strategic management; liaison with the Board and external parties and funding. The operations manager is responsible for managing the field work functions, credit control and arrears management. BOARD OF DIRECTORS Name Position Profession Brent Williams Chairperson Attorney Ralph Freese Treasurer Development consultant Derrick Abrahams Community representative Store assistant Wilhelmina Trout Development consultant Jacquie Bouile Development consultant Alistair Rendall Architect Olivia van Rooyen Executive director, the Kuyasa Fund LOANS OFFICERS SAVINGS ORGANISERS Eleven loan officers implement this programme area. The loan officers interview clients, assess loan applications and make recommendations to the operations manager. Collections and follow ups on arrears are also managed by the loan officers. Two full-time savings organisers are responsible for promoting the formation of savings groups, providing support to existing savings groups, and providing consumer education and committee training. ORGANISATIONAL DIVERSITY TABLE Black White Female Male Female Male Total Board of Directors 2 3 1 1 7 Professional Staff 9 5 14 Administrative Staff 4 4 PROGRAMME SUPPORT STAFF Three programme support staff include a general administrator and two loans administrators. Together they provide logistical, financial, administration and reception functions, and arrears monitoring support to the loan officers and operations manager. 10
PPositioning Kuyasa Since its inception, the Kuyasa Fund has sought to provide finance to those low-income clients who are not served by the formal finance sector. The absence of a banking system that serves the majority of South Africans has negative implications for the economic and social development of South Africa and for political stability. Kuyasa believes that access to savings enables households to build assets, not only in the form of housing, but that access to loans allows for capital to generate income, acquire resources and smooth income flows. As such, while Kuyasa is strongly focused on the successful provision of microfinance, we draw our motivation from the belief that it is one of many tools in the fight for poverty alleviation. The banking sector The Financial Services Charter defines the low-income market as Living Standards Measures (LSM) 1 to 6, based on variables including criteria such as income, education, lifestyle and living standards. As demonstrated in the detailed breakdown below, the unbanked client market of households earning below R3 575 is not homogenous and there is a low feasibility of developing mass products that address the needs of all clients equally, particularly in respect to credit. LSM level 1 2 3 4 5 6 7 8 9 10 Average monthly h/hold income (R) 770 879 1 104 1 534 2 195 3 575 5 504 7 427 10 561 21 591 Percentage of population unbanked (Adapted: Porteous, 2003) 92% 88% 80% 71% 63% 45% 29% 22% 13% 9% Banks have not been active in this market and consequently have a very limited knowledge of it. Over the last ten years, most attempts by banks to provide credit to the lower end of the market have ended in failure. This is in part due to the banking sector s risk averse culture and rigid, formal practices and procedures. The banking sector acknowledges through its commitment to the Financial Services Charter the need to develop sustainable financial institutions for the poor and to establish partnerships with the developmental microfinance sector, but the substance of this strategy needs to be developed. Banking is becoming increasingly sophisticated, and a number of developments that impact on the banks relationship with the poor must be taken into account: The setting of targets for access to banking services (part of the Financial Services Charter). It is worth noting that these targets are over and above the criteria being set for ownership and procurement. The growing numbers of employed and unionised workers who are gaining access to credit, due to pension and provident fund security and payroll deductions. The emergence of the cash loan industry now significantly owned by formal financial institutions. These last three factors have contributed to the increase in banking services to the previously excluded, as well as an increase in the numbers of the fully banked and under-banked. In order to reach the markets that cannot be serviced through its traditional methods, the larger banks have, since 2000, explored three paths: The takeover of a smaller lender, for example BOE s takeover of Cashbank. The use of a niche lender to originate the loan and thereafter taking over administration loan. The formation of a strategic partnership with a smaller lender, such as the partnership between Standard Bank and African Bank. These indirect approaches to the low-income niche market enable banks to overcome their weaknesses specifically in relation to product offerings, pay-out mechanisms, collections and pricing. However, the most consistent providers of financial services to the FSC s lowincome-niche market are informal, group-based mechanisms (such as burial societies and stokvels) and non government organisations. This developmental microfinance sector provides financial services specifically to augment the livelihood strategies of poor households. Due to a developmental focus on poor and less poor households, these institutions are able to innovative and to reach poorer clients more successfully than formal banks. They are limited in their scale and impact due to human resource constraints and a lack of suitable funding, management capacity and institutional infrastructure such as management information systems. The almost complete switch to electronic banking, particularly the use of automatic teller machines, generally located outside townships. The growth in prevalence and sophistication of red-lining. The acceptance of the mortgage bond as the primary tool of security for housing loans, virtually in one stroke disqualifying the poor from this type of loan. 12
THE BANKING PYRAMID Kuyasa s niche BROADLY, SOCIETY CAN BE DIVIDED INTO THREE CATEGORIES: the fully banked the under-banked the unbanked Racial divide in the banking spectrum The fully banked have access to both savings and loan products through the formal sector The under-banked use formal institutions to clear salaries and the micro-finance industry for consumer credit. The Kuyasa Fund sits closer in ideology to the developmental microfinance sector, but can boast of being 79% operationally sustainable after four years of activity, and anticipates achieving full sustainability by 2007. Kuyasa maintains a bad debt rate of just below 5%. We operate without any institutional support from the financial services sector, other than banking services obtained at commercial rates. Wholesale funding to finance our loan book is obtained from the Urban Sector Network Opportunity Fund and the Tembeka Trust. Operational funding to overcome shortfalls is sourced from Northern Hemisphere donors including the EU, USAID, Cordaid, the Culemborg municipality in Holland and the Gilles Foundation in Belgium. Further information is provided in our Financial Information section later in this report. The unbanked have no access to savings and loans services from the formal sector Kuyasa is regarded as one of the country s most effective and efficient development microfinance institutions, while retaining its strong focus on poverty. As a niche lender, we have had to build up operational infrastructure without the benefit of any cross-subsidisation from other more profitable operations. However, our relative success does not mean that profitable lending is possible in the short term, for reasons including: Difficulties in achieving appropriate economies of scale at a fast enough rate, Human resource and other supply-side constraints, The challenge of transferring some transaction costs, such as repayment collection, The fully banked sector of society has access to both savings and credit services from banks and is also able to obtain capital for economic growth and development, and for building personal equity. to voluntary client structures by using group lending methods Cost recovery and maximising efficiencies over time are certainly possible, but more affluent market segments will probably always be more profitable. Members of the under-banked sector, typically have a bank account only to clear their salary and to give them access to their savings. Those in the unbanked sector, by contrast, have no access to banking either as savers or borrowers. Their only experience of savings revolves around the concept of a group savings scheme while their experience of formal sector finance is limited to consumer credit. 14 15
Housing: our primary concern The rapid growth of an active micro-lending industry in South Africa has been an influential trend over the past ten years. The vast majority of South Africans, however, are still being excluded from meaningful banking services. And, inevitably, this economic exclusion has impacted on housing delivery in a number of ways: The construction of subsidised houses that are generally small, of inferior quality and socially and environmentally unsustainable. Our Programme of work Our programme has two thrusts: Delivery via a community-based savings and loans programme Documenting and analysing practices and experiences in such a way that they impact on the end-user finance and housing provision environment Government subsidy aside, there has been little investment in housing, given that poor people are denied access to savings and loans due to low interest on savings, Community based savings groups and Kuyasa loans Parallel, linked processes Documenting & analyzing practices and experiences to: high service charges and red-lining. Recipients of a housing subsidy often sell their houses at below market value. The reason for this is that the buyers generally will not have access to sufficient finance required for making a fair sale. Although the Government s housing subsidy scheme is said to be the largest capital subsidy in the world and is a major investment in the poor, only limited trans- > To promote and support saving groups in order to build the financial and social capital of individual savers and savings groups > To explore, through a loan programme, appropriate credit mechanisms for the very poor IMPACT > Improve and inform our practices > Contribute to the broader knowledge base > Impact on policy and enabling environment IMPACT fer of wealth takes place because true value can not be achieved in the low-cost housing market. Socio-economic impact at household & community level Broader impact on society: other communities, practitioners and policymakers The Kuyasa Fund believes that inadequate housing is a major component of poverty. Our loan programme uses the provision of microfinance services as a strategy for fighting poverty, by developing a range of appropriate financial responses to housing needs. It is our belief that this will lessen poverty levels and increase the potential of households to improve their standard of living. By helping people to improve their housing, we enable positive effects on housing equity, personal empowerment, community upliftment and long-term integration within the formal financial sector. Kuyasa works at the lowest end of the housing finance market, with low-income communities with an average monthly household income of R1 600. Our clients are drawn from those who qualify for the government housing subsidy, and at present our loans are targeted solely for use in the housing process. Housing situations currently addressed by the Kuyasa Fund are: The provision of housing on serviced sites Non-subsidy linked and non-project linked housing loan products Improvements and extensions to RDP housing Hostel redevelopment The two thrusts have been designed to complement, support and inform each other. Stumbling blocks experienced in the savings and loans programmes inform the Fund s research agenda. In turn, research findings influence the workings of the programmes. All of these give rise to key issues for lobbying and create opportunities for the development of strong networks with other organisations and institutions. Kuyasa s work can be placed into three inter-dependent programmes: The mobilization of savings groups The provision of housing loans Documentation and networking The mobilization of savings groups The building of a culture of savings is an important component of Kuyasa s work. Research conducted by DAG prior to the formation of Kuyasa found group savings to be the preferred saving method among people in targeted communities. Kuyasa borrowers save through community-based savings groups, based on principles developed through years of participation in stokvels (umgalelos). 16 17
Delivering value At Kuyasa we consider that we deliver value through three main conduits: Financially - through the number of loans we disburse, and through the value that these loans add to the housing process. Socially - through the client base that we target, providing microfinance to specific, currently unserviced gender, employment and income groups. The concept of savings as the basis for accessing credit and building equity is fundamental to Kuyasa s approach. Savers are encouraged to network and build savings as a means by which both social and financial capital can be built. A financial life skills programme emphasises savings rather than the obtaining of credit as the key to achieving objectives. Savings training programmes are used to support the development of skills among participants and to promote good governance in savings groups. Furthermore, these programmes try to ensure that committee members understand their role as the custodians of funds held by these savings schemes. The provision of housing loans In considering a credit application, Kuyasa examines an applicant s savings record. Qualification for one of our loans stipulates that a client should have saved in a group for at least six months. Thereafter, the maximum loan granted is limited to three times the savings up to a maximum of R10 000. With an interest rate of 32 percent per annum, it is quite clear that Kuyasa does not provide credit based on subsidised interest or soft credit criteria. Its focus, rather, is on the development of a credit model that provides access to credit for a segment of the housing market, which because of a lack of formal employment and collateral security, is regarded as high risk. The maximum period allowed to repay a loan is 30 months, although we recognise that our clients face considerable hardship and we are flexible in our repayment schedules to a certain extent. Documentation and networking It is inevitable that some parts of the programme will work well and others less so. Kuyasa therefore constantly documents and reflects on the lessons it learns. Its aim in this respect is to be able to feed into an ever-growing knowledge base a base that covers the impact of end-user finance on development. Through networking and through sharing its knowledge and experience with others, the Fund hopes to contribute towards the building of an enabling environment for the development of appropriate end-user finance models. Methodologically through the added value and sustainability our model of housing finance delivers to clients, donors and development practitioners. Financial value The financial and value-added indicators for the first four years of Kuyasa s operations clearly show the impact of Kuyasa loans on overall investment in housing, as well as their impact on the quality, affordability and size of houses built. FINANCIAL INDICATORS Indicator Rand Percentage Value of subsidy 27 020 000 62% Value of savings contributed 4 863 600 11% Value of loans invested 11 606 868 27% Total Investment in housing 43 490 468 100 % VALUE ADDED TO GRANT FUNDING (AS AT MARCH 2004) Operational grant funding received 2001 to March 2004 R4,248,311 Cost per square meter of subsidy house R500 Number of square meters of space for grant funding 8,497m2 Average space increase through Kuyasa loan 24 m2 No. households to benefit if grant were given to households 354 No. of Kuyasa clients to March 2004 2077 Impact leverage 5.86 Kuyasa development impact: 2 643 loans given 1 740 of these given to women-headed households R6 million in client savings has been mobilised our loans have added value to a total of R25 million in government subsidies delivered to our clients house size in our projects is between 36m 2 to 60m 2 over contractor-built houses of 23m 2 building equity through housing and supporting the low-cost housing market 18 19
Loan usage 57% new homes 23% extensions 16% thermal efficiency 4% finishes Social value Our clients at a glance: 72% women 75% between 40 and 60 years old 68% informally employed or pensioners 60% earning below R1 500 93% earning below R3 500 CLIENT PROFILE Women Men Value of loan book 70% 30% Average repayment period 17 16 Average loan size R3 524 R3 764 Average instalment R263 per month R293 per month Average monthly income R1 608 per month R1 958 per month Kuyasa s concern with sustainability has primarily been focused on client household sustainability before that of our institution and operations. We have explicitly sought to target our services to women who head their own households, as well as those in informal employment and pensioners, as these groups have traditionally been excluded from formal finance. We consider that the benefit of our loans are extended to the households of our clients, on average comprising five people. An investment in housing is also an investment in a community, and promotes the upliftment and social cohesion of neighbourhoods. We believe that this unquantifiable advantage is as important as the financial benefit of the loans. BORROWER INDICATORS (AS AT SEPTEMBER 2004) Indicator Number No. households taking loans 2 643 No. women headed households 1 877 Total No. people impacted upon 13 215 Client Profile Kuyasa s clients typically are in the small, medium, micro and home-based survivalist enterprise sectors, pensioners, domestic workers or dependent on social grants. Most of our borrowers (60%) earn below R1 500 per month, and a total of 93% earn below R3 500 a month. 68% of our clients are either informally employed, self-employed or pensioners, while the remainder are employed in the informal sector. The remarkably small difference in the average income of the formally employed (R1 821 per month) and informally employed (R1 836 per month) confirms that we are focusing accurately on informally employed people who would otherwise be excluded from credit by formal institutions. Women constitute the vast majority of Kuyasa borrowers at 72%, and account for 70% of the value of loans taken. Women s lower incomes account for their smaller loan size and longer repayment period, but the net result of how they structure their loans is that in comparison with men they spend the same proportion of income on loan repayments. GENERAL PROFILE Category Criteria Percentage (TOTAL NO OF CLIENTS) Gender Women 72% Men 28% Age Under 40 years 27% Between 40 and 60 years 58% Over 60 years 15% Income Between 0 and R1 000 per month 27% Between R1 001 and R1 500 per month 29% Between R1 501 and R2 500 per month 29% Between R 2 501 and R3 500 per month 8% Over R3 500 per month 7% Employment status Formal 33% Informal 48 Pensioner 14% Self-employed 6% Credit Bureau status Normal 74% Listed 13% None 13% Average family size 5 Average house size 54 m 2 20 21
FFuture challenges FFuNDING Below we list what we consider to be the key challenges facing Kuyasa in the year ahead, and beyond. We intend to have addressed these challenges by our second Annual Report in 2005. Since its inception the Kuyasa Fund has received R4 248 311 in funding from donors in developed countries. This support has been invaluable in enabling Kuyasa to provide services to poor and marginalized communities. Developing and managing an appropriate replication and expansion strategy refining our model of housing finance so that it can be applied to different community types beginning to plan expansion, both geographically and with regard to capacity Management and institutional capacity ensuring that expansion of our client base is matched by our institutional capacity to continue servicing our clients to the same high standard ensuring that our management and information systems keep pace with our increasing client base developing more detailed information on borrower profiles, aiming to develop a more accurate risk profile of use for both the Fund and other role players in this market Developing human resources our staff are essential to the success of Kuyasa, and we seek to ensure they remain motivated, enthused and continue to learn in a stimulating environment ensuring that we can retain high calibre individuals within our organisation, and 7.70% 38.22% 2.08% 42.20% EUROPEAN UNION FORD FOUNDATION URBAN RESOURCE CENTRE 2004 can recruit new staff of a similar standard promoting staff skills development Funding and financing strategy 5.86% 0.85% CULENBORG MUNICIPALITY As a not-for profit organisation working with poor households which places an emphasis on client sustainability over institutional sustainability, we require ongoing funding our current donors have played a vital part in ensuring our success, but we are mindful of the need to diversify and increase our funding sources Management of supply chain and partners ensuring that Kuyasa retains its focus on microfinance and does not diversify into development or supporting roles in communities developing networks and relationships with partners in the field who can take on these support roles 20.68% 22.86% EUROPEAN UNION HOUSING FINANCE RESOURCE PROGRAMME CORDAID SUNDRY LOCAL FUNDERS 49.74% 2003 The table below summarises the amount of funding received and the number of loans it has generated. The Kuyasa development methodology has been used to add value to the funding received. LEVERAGING OF GRANT FUNDING 2000-1 2001-2 2002-3 2003-4 No. loans 169 358 574 970 Grant Funding 313,237 985,263 1,811,944 1,137,867 Value of loans 521,384 1,373,500 2,290,099 4 374 984 Leverage of grant 1.66 1.39 1.26 3.84 funding - value Funders for 2003 and 2004 23
(ASSOCIATION INCORPORATED UNDER SECTION 21) Balance Sheet 2004 2003 R R Assets Non Current assets Property, plant and equipment 620,000 620,000 Current Assets 6,123,699 4,112,740 Trade and other recievable 5,888,258 3,478,847 Cash and Cash equivalents 235,441 633,893 6,743,699 4,732,740 Total Assets Equity and liabilities Capital and reserves Accumulated Funds 646,537 855,105 Non current liabilities Borrowings 5,219,942 2,836,975 Current liabilities 877,220 1,040,660 Trade and other payables 200,618 704,902 Security deposits held 676,602 335,758 Total equity and liaibilities 6,743,699 4,732,740 (ASSOCIATION INCORPORATED UNDER SECTION 21) Income Statement for the year ended 31 March 2004 2004 2003 R R Gross Revenue 3,043,050 2,722,492 Operating Costs 2,776,122 2,008,410 Operating Profits 266,928 714,082 Finance Costs 475,496 218,290 (Loss)/profit -208,568 495,792 The Kuyasa Fund (Association Incorporated under Section 21) Funding Received 2004 2003 R R European Union 607,239 414,374 SCOS 140,929 901,700 USAID - 374,894 CORDAID - 106,287 WCCHT 550,000 - Ford Foundation 110,790 - Urban Resource Centre 30,000 - Sundry Local Funders - 15,391 Development Action Group - -1,283 1,438,958.00 1,811,363.00 24 25
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