Phezulu Packaging & Phakamani Foundation
On 11 August 2016 we conducted a site visit to the Empangeni branch of the Phakamani Foundation (47% shareholder in PheZulu Packaging).
We were fortunate enough to meet the local team who really impressed us with their hospitality and the energy displayed toward their job functions. The development loan officer team is headed up by the branch manager Zamandayi Msomi, who in turn reports to the KZN regional manager Hezekiel Chiloane.
How it works: The development loan officers communicate the message of the Phakamani program throughout the community, and often involve local community leaders in explaining the programme to potential entrepreneurs. Only black female South African citizens may apply to be part of the programme. Loans are only issued to groups of four/five women. The group of women have access to a central bank account (into which the foundation loans are paid), and there are three signatories on the bank account to ensure the correct allocation of funds.
Once the entrepreneurs have procured their goods, and generated their return, they repay the loan into the foundation bank account. The development loan officer team assists the entrepreneurs with the completion of deposit slips at the local bank if they require assistance. Monthly centre meetings are held where the group returns their individual deposit slips showing the repayment made. Although the individuals of the group are approved for financing on an individual basis, the group remains responsible for the repayment of the group total loan (if one member of the group defaults, the rest of the team need to compensate for the default).
Before Phakamani will approve a “group loan” the members of the group need to be approved by the community centre chairman, as well as the other members of the group they form part of. Loans issued individually range anywhere from R300-R3000. For July 2016 KZN as a region collected loan repayments of R1.5mil. As the loans are so small ,it is extremely impressive to see the administration covered by a branch team. Loan cycles run for three months the first time a group participates in the programme. Entrepreneurs returning for second cycle loans can apply for four month loan term.
Although our timing did not align with a centre meeting, we were fortunate enough to meet with four different ladies currently part of the programme. Most of these ladies were on their second or third loan cycle and it was fantastic to see the warm response the Phakamani team received from the Entrepreneurs. Below are some of the ladies we met.
Nana Mnguni is centre chairman for the Empangeni branch, and is currently on a third cycle loan. She makes a trade from traditional clothing which gets sold to members of her community.
Thulisile Ngema is a truly inspirational women. Although blind, she has not let her disability discourage her from taking on the risk of a Phakamani loan nor has she let it stop her from using her basket making talent in her pursuit of generating an income for herself. The funds lent through the Phakamami foundation have enabled her to purchase the raw material and tooling needed in order to produce these high quality baskets. Thulisile has already had success in sales at the Richards Bay Mall. We admire her courage in the work she is doing.
Ntombikayise Manqele is on a third cycle loan, and operates a general food stall. On the menu for the 11th were deep fried Vet Koek, and fried fish dishes. Ntombikayise also has a coop of live chickens which she buys, fattens up, and then resells to members of her community.
Zodwa Kunene is also on a third cycle loan. She is also in the business of sewing traditional clothes but also purchases other accessories for resale (eg. handbags).
We were extremely humbled by our visit to the foundation, and are proud to be making a contribution to Phakamani through our business dealings.
To learn more about our shareholder, please visit www.phakamanifoundation.org.