Hi Phakamani Friends,
I hope this finds you in good health.
June marked the end of the 2023/24 financial year, and we are currently undergoing our external audit. Indications are that the deficit will be significantly below the budgeted deficit. This pleasing result is partially due to a planned reduction in headcount (through natural attrition) and primarily due to the ongoing and faithful support of our donors and partners. We are deeply grateful for the support we receive to enable the Phakamani vision.
The illustration that places Social and Financial objectives on opposite sides of a scale is so true. As we continue to focus on the poorest of poor, and service smaller loans, we will continue to require a level subsidy in the form of donations, grants and distributions. We are truly blessed to have established, generous, and faithful donors, grant funders, and the Phakamani Trust. This does however not detract from our intention to continuously improve productivity and growth to achieve operational self-sustainability over time.
In February this year we started a conversation with Allan & Gill Gray Philanthropy South Africa (AGGPSA), and I am delighted to say that we recently concluded a three-year grant agreement which provides funding over the period. The AGGPSA initiative includes a research component to better understand the informal market and mechanisms / methodologies that are successful in bringing about positive change in these communities. Rightfully, Phakamani has much to offer in this context and we are humbled to be included amongst eight other like-minded and impactful organisations. I requested prayer for this in my previous letter and acknowledge God’s faithfulness with gratitude.
We conducted an organisation-wide staff survey in June and received responses from just under half our staff. It was great to see the level of participation and receive detailed positive insights and opportunities for improvement. Amongst others, we asked what staff liked most about working at Phakamani and responses included: changing lives of the poor, working with different people, opportunities for growth, satisfaction when clients achieve their goals, meeting new people, bringing hope to poor women, the privilege to impact lives… It was most pleasing to see the close alignment between Phakamani’s vision and the satisfaction that our staff get from the work they do.
We have noted positive trends in some of our key indicators over the past year, which in turn indicates that conditions are improving for our clients and their customers, including:
- The number of active groups continues to show year-on-year growth
- Our client retention rate remains above the previous two years
- New and repeat client applications grew over the past 12-months
- The 12-month average repayment rate is higher than the previous two years
I am positive about the year ahead, and activities in the broader South African environment to improve the economy for all. There is a growing awareness of the needs of the communities in which we operate, and the role that organisations like Phakamani can play in addressing poverty, unemployment and inequality. We pray that we continue to find opportunities to grow with our clients.
God bless,
Eric
