IDC reports 55% growth in lending
THE Industrial Development Corporation (IDC), owned by the South African government, recently released its annual results to March showing funding activities over the year growing 55 percent to R13.5bn, as well as approvals up by a third.
Interviewed on Summit TV, CEO of the IDC Geoffrey Qhena, said this level of investment created about 45 900 jobs, including some that were ‘saved’ rather than new jobs created, as companies were in distress.
He said the IDC made a commitment of about R6bn more than three years ago to help distressed companies, and of this about R900m remained.
He noted that the fact that not all the R6bn was taken up reflected the resilience of the South African economy in that companies were able to find other sources of funding.
“It is important that the investments we make create jobs. What’s equally important is that the jobs are sustainable. What we are measuring is the direct impact of the jobs because some of the investment will have indirect effects,” he said.
He noted that the IDC was investing heavily into the green industry. “It’s been the first time as a country we’ve invested in renewables, which was about R5.2bn — and into agricultural processing, mining and beneficiation. What’s also pleasing is that about 25 percent of that will be on the manufacturing side, which we know has been battling.”
The IDC had seen an increase in applications from manufacturing — and had administered a scheme on behalf of the Department of Trade and Industry in the textile industry to create jobs by helping firms modernise so as to deal with competition.
The IDC’s minimum loan is R1m but in the next year that will increase to R5m, said Qhena.
The IDC’s mandate covers not just South Africa but the entire continent. Qhena explained that about 18 percent of its total book was for investments outside South Africa.
“Needs are a little different there where spending is mainly infrastructure-related investment, being mining and power. There’s also agri-processing and some tourism.”