Old Mutual commits over R400m to shared economic growth

Old Mutual today announced it will invest more than R400 million in projects aimed at improving the economic prospects of ordinary South Africans, as envisaged in the government's Accelerated and Shared Growth Initiative for South Africa (ASGISA).

The funds will be used to finance micro, small and medium-sized women-owned businesses in South Africa's poorest regions, and to fund financial education and skills development.

Jim Sutcliffe, Old Mutual plc Chief Executive says that while Old Mutual is now a global company, South Africa remains its heartland. "These initiatives are real partnerships aimed at building a prosperous and sustainable future for all the people of South Africa."

The R400 million is part of the R1.3 billion proceeds resulting from the sale of 54 million Old Mutual shares that remained unclaimed by policyholders following the closure of the Old Mutual Unclaimed Shares Trust on 31 August 2006. These 54 million shares represent some 2% of the original share capital after demutualisation in 1999.

The remainder of the proceeds will also benefit South Africans: R400m will be used to meet share claims of any remaining eligible policyholders, and R300m will be used to enhance the benefits of certain small policies.

According to Paul Hanratty, MD of Old Mutual (South Africa) a Section 21 (non-profit) organisation, called "Masisizane" ("Let's help each other"), will deliver five shared-growth initiatives funded by the R400m investment.

"The R400 million will be distributed in four keys areas of the South African economy, namely job creation and enterprise development, financial education,
skills and capacity building and training," says Hanratty. "Each initiative will have an independent and inclusive governance structure of its own, including representatives from Old Mutual plc, Old Mutual (South Africa), the group's empowerment partners (WIPHOLD and Brimstone) and external representatives."

Hanratty says that micro enterprises and SMEs are the engines of real economic growth. "If they grow, job creation grows; and when jobs are created, poverty diminishes. This is real economic growth - when it is shared by all the people of our country."

In summary, the initiatives are:

Women-owned Enterprise Development
The objective of this R260m initiative is to facilitate the development of women-owned SMME businesses that create employment in various economic sectors, with a special focus on micro-sized businesses in rural areas, and small- and medium-sized businesses in urban areas. In the long term, this should translate into wealth for individuals, sustainable home building, access to education, and re-investment into the economy.

Financial Education Initiative
The aim of this R60m fund is to help South Africans by improving financial discipline and financial knowledge across all income groups. The objective of better financial education is individual financial freedom, regardless of income level.

iLima Trust
R50m will be placed in this Trust, which will aim to assist in developing the ability of South African municipalities to serve their communities on a sustainable basis. Capacity building and knowledge transfer will be delivered by ex-executive and senior managers leaving Old Mutual. These activities are conducted in partnership with the Department of Provincial and Local Government, as part of Project Consolidate.

JIPSA initiative
The objective of this initiative is to train people in local government organizations on project management skills. This is a continuation of a partnership initiative between Old Mutual and the Deputy President's Offi ce in respect of deepening the ability of municipalities to deliver services. A further R5m will be invested into this initiative.

Promotion of Investment into South Africa
A R25m pool of funds has been allocated to improve perceptions of South Africa as an investment destination. Under the stewardship of Old Mutual plc CEO, Jim Sutcliffe, the spend will be aligned to the four broad themes of job creation and enterprise development, financial education, skills and capacity building, and training.

All of these interventions are in addition to existing business and corporate social initiatives undertaken by Old Mutual South Africa.