The Eastern Cape Development Corporation (ECDC) says it disbursed R168 million to 263 businesses in the 2016/17 financial year.
Announcing the development financier’s annual results today, ECDC chief executive Ndzondelelo Dlulane says the disbursed amount exceeded its R110 million target. A total of 118 youth-owned businesses benefitted from the loan disbursements. The majority of disbursements, R115 million, went to businesses involved in construction activities. Loan disbursements were dominated by businesses in construction because of the significant infrastructural backlogs in the Eastern Cape. Largely, these businesses were awarded infrastructure built contracts. This demonstrates ECDC’s responsiveness to provincial priorities and realities.
“A total of R36 million went to businesses in the service sector. Of this amount, R27 million went to those businesses who had been awarded supply and delivery contracts. Businesses in retail received R7,5 million, those in mining activities R4,4 million while businesses in aquaculture accounted for R3,6 million of disbursements. A total of R1,8 million went to businesses in other sectors of the economy.
As a priority and for sustainability purposes, ECDC continues to target long-term loans for high revenue injections and annuity. The strategy is to continue on this path mindful that its fruits will only be realised in the medium to long-term. While short-term loans are good for liquidity purposes their margins are low. Loan repayments were R179 million which reflects an 86,3% repayment rate,” says Dlulane.
The district spread of the loan disbursements was: R80 million to OR Tambo, R25 million to Buffalo City Metro, R21 million to Amathole, R17 million to Alfred Nzo, R8 million to Sarah Baartman, R8,4 million to Chris Hani, R2,2 million to Joe Gqabi and R6,5 million to the Nelson Mandela Bay Metro.
Dlulane says R8 million was also approved for disbursement to 16 co-operatives under the ECDC-administered Imvaba Co-operatives Fund. Of this amount, R5,4 million was disbursed in 2016/17. An additional R3,2 million was disbursed to 20 co-operatives against remaining commitments from the 2015/16 financial year.
A further R10,2 million was disbursed to eight companies through the Eastern Cape Jobs Stimulus Fund which resulted in 939 jobs being saved. The fund is meant to avoid the potential closure of businesses in distress.
He says 368 SMMEs received integrated non-financial support worth R20 million.
“I am pleased that these loan and grant instruments facilitated the creation and saving of 2,235 jobs in 2016/17. I am also pleased that these results come at the back of an unqualified audit opinion which builds public confidence in the Corporation. The ECDC balance sheet also remains strong in that its total assets exceed its liabilities by R1,3 billion. The driver for this positive book value is mainly an increase in the value of investment properties.
Rental collections on ECDC’s property portfolio which includes residential, commercial, industrial and light industrial properties was R67,9 million with total income being R74,2 million in 2016/17,” says Dlulane.
A total of R76,9 million was also leveraged in third-party funding for the implementation of projects in 2016/17 to support mainly greenfields projects from ideas and concept stage to bankable commercial investments. ECDC also contributed R3 million to the technology innovation fund to assist Eastern Cape innovation projects.
The Corporation also facilitated investments worth R633 million into the province in 2016/17 resulting in 479 jobs being created and saved.
Twelve film Eastern Cape companies were also taken by ECDC on an outward trade mission to the United Kingdom in 2016/17. A further 23 SMMEs participated at the Lithuba Lakho Competition and Exhibition.
Dlulane says ECDC is also pleased that it managed to implement four schools worth R227 million for the Eastern Cape Department of Education. Three of these schools had reached practical completion by the end of 2016/17. These schools are earmarked to benefit an estimated 3,214 learners. The schools are Dilizintaba Secondary School in Tsolo (R48,8 million), Plangeni in Mbizana (R50,3 million), Flagstaff Primary School (R38,5 million). Flagstaff High School (R90 million) is still under construction.
“All these interventions resulted in the facilitation of 4,209 jobs. To further improve job creation and economic activity, ECDC will continue to support the re-establishment of industrial parks in the province which were once drivers of regional economic growth. ECDC is pleased that in 2016/17 it finalised the Dimbaza Industrial Park Master Plan which received cabinet approval. ECDC also played an important role in the re-establishment of the Vulindlela Industrial Park in Mthatha and the iKomani Industrial Park in Queenstown. These industrial parks should reinvigorate economic activity and job creation,” Dlulane adds.