Industrial Development Corp increases disbursements by 40% to R15.4bn | Fin24
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Industrial Development Corp increases disbursements by 40% to R15.4bn

Sep 26 2018 07:31
Lameez Omarjee

Total disbursements from the Industrial Development Corporation (IDC) increased by 40% from R11bn to R15.4bn during the 2018 financial year, this is according to the annual report tabled before Parliament last week.

The IDC is a national development finance institution, set up to promote economic growth and industrial development. 

The report shows that during the period the group’s operating profit increased 90.5% to R2.58bn. Net profit amounted to R3.22bn, up nearly half (47%) from R2.2bn reported in 2017.

The group owned R136.9bn worth of assets (up 5%) compared to its R44.85bn liabilities. The group’s net cash position was slightly lower (19.2%) than the previous year's, at R6.14bn.

The report further details the disbursements made throughout the period.

Funding approved for black industrialists increased by 67% to R7.9bn. However, amounts approved for black empowered companies declined by 4% to R9.7bn.

Amounts approved for businesses with women ownership of more than 25% was down 32% to R2.2bn, this includes an amount of R100m for a women-empowered construction company which falls outside of the IDC’s priority approved sectors.

Amounts approved for businesses with youth ownership of more than 25% was down 59% to R1bn.

In his foreword to the report, Economic Development Minister Ebrahim Patel noted that based on his five-year targets set in 2015, the IDC has approved 67% of the R23bn originally set aside for black industrialists.

The IDC also surpassed the five-year target set for women entrepreneurs. So far R6.6bn was approved for women-empowered businesses over the past three years, versus the R4.5bn target, he explained. Approvals for youth entrepreneurs stand at R4.4bn, a R100m short of the R4.5bn five-year target.

Patel explained that the targets were set to begin a process to direct IDC funding towards greater economic inclusivity. When the GDP growth rate is considered - more needs to be done in the period to come, he said. "The quality of investment will also need to be improved, that is to achieve a better alignment between investment approvals and the industrialisation mandate of the IDC," he said. 

The minister will also work with the IDC board to strengthen a stimulus package to support township enterprises and other parts of the economy, to attract funds that support emerging entrepreneurs.

The minister also noted the loan from the IDC to Gupta-linked Oakbay Resources' Shiva Uranium mine which received media attention in December 2017. The minister said since then the board has instituted a range of measures to strengthen transparency and governance. Patel also previously told members of Parliament in a written reply to questions that litigation is in place to recover R37.5m which is left from the R250m principle amount of the loan as well as the R250m accrued interest.  

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