New scheme to tackle unemployment, boost economy

New scheme to tackle unemployment, boost economy

Job creation

The Industrial Development Corporation (IDC) has launched a R10 billion scheme, to run over 5 years, aimed at facilitating job creation and growing the economy.

The announcement was made by Chief Executive Officer Geoffrey Qhena on Tuesday at IDC’s head office in Sandton.

Outlining the scheme, Qhena said funding will be available at prime less 3%. This will be across all IDC mandated sectors to businesses which demonstrate economic merit and efficiency in new job creation. Applications will be considered from R1 million up to R1 billion.

Overall pricing

The IDC has also reviewed its current pricing model. Projects that have high development impact (including a combination of job creation, rural development, BBBEE, SMEs, etc) will benefit from a reduction of up to 1% on the loan facility.

The facility excludes those that may qualify under the R10 billion scheme.

“It is still important that businesses have prospects of acceptable profitability to service their financial obligations,” said Qhena.

Additional assistance to companies in distress

Also, the IDC has set aside R750 million in total to assist those businesses that have been affected by the recent floods and drought. R500 million of this will be made available to assist businesses that fall within the IDC mandate and will be made available at prime less 3%. Applications for the flood and drought distress funds will only be considered for one year, starting March 1st, 2011 to March 31st 2012; although the repayment period may be over a number of years.

The remaining R250 million will be loaned to the Land Bank to assist those affected agricultural businesses (primary agriculture) that fall outside IDC’s mandate. The businesses must be viable and demonstrate that their distress was a result of the floods or drought.