28 Sep IDC facilitates R7.4 bn worth of investments securing 13 354 jobs – improved balance sheet expected to augment future funding activities
In line with its mandate to grow the productive sectors of the economy, the Industrial Development Corporation (IDC) facilitated R7.4 billion worth of investments into the local economy for the financial year ending 31st March 2021. This figure consists of R6.3 billion from on-balance sheet funding and R1.1 billion off-balance sheet funds managed on behalf of other government entities.
Despite a subdued economic environment characterised by an economic lockdown, the result of the Covid-19 pandemic, the Corporation facilitated the creation,saved and sustained a combined13 354 jobs. The Corporation further approved a combined R950 million from its Covid Essential Supplies and Distress Funds to support businesses impacted by the Covid-19 pandemic.
“The disruption in both the local and supply chains resulting from the economic lock down had a knock-on effect on our funding activities. This is telling in the strain that our business partners endured. This context underpinned our decision to structure some funding products as well as interventions aimed at providing cashflow relief and deferments amounting to R778 million for struggling clients,” said IDC Chief Executive Officer, TP Nchocho. This intervention benefited 75 IDC clients spread across mining, manufacturing, metals, Agro-industrial, services, and small businesses.
While investments the Corporation facilitated for the year in review declined by 37% compared to the previous corresponding period, the scale in jobs supported at companies that benefited from the repayment relief is encouraging. “It remains our strategy to invest in viable businesses while maintaining our risk appetite,” said Nchocho.
Notwithstanding the challenges, IDC’s strategy to improve and expand the quality of its portfolio of clients yielded positive results, with R1.5 billion (39%) of new approvals rating as low- to medium risk. Nchocho added that while some distressed legacy investments skewed this picture, strategic interventions adopted during