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

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.  

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

Follow Fin24 on Twitter and Facebook. encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.



Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Can the SABC avoid retrenching staff?

Previous results · Suggest a vote