UPBEAT Eastern Cape Development Corporation (ECDC) chief executive Sitembele Mase announced yesterday the development financier had disbursed loans of R130-million to 496 enterprises in the 2012-13 financial year – a hefty R55-million increase from last year when R75-million was disbursed to 330 businesses.
Addressing the media at an annual financial results release in East London yesterday, Mase highlighted that the financier had received its fifth consecutive unqualified audit opinion and the ECDC would continue in its “new direction” of focusing on economic sectors which use natural resources such as aquaculture, renewable energy and agro-processing.
In stark contrast, the ECDC’s non-performing sector of property ownership would be largely disposed of because they “do not belong in the balance sheet of the ECDC”.
Mase said once the 238 residential properties valued at R110- million were disposed of by the end of this year, the money would be used as a catalyst for economic development in the province and to benefit growth and the creation of jobs.
He said 113 offers had already been received for these properties, with 35 deals about to go through.
Regarding loan repayments, the ECDC collected R172-million, a healthy increase from last year’s R91-million – a “financial injection” which resulted in the creation or saving of 1849 jobs.
“The corporation is pleased that improved operational efficiencies have also resulted in the reduction of loan impairments of R16.8-million compared with the previous year’s R31.7-million.”
Loan approvals were spread across several sectors including construction, which received the bulk of approvals at R59.9-million, services (R37.1-million), agro-processing (R13.5-million), manufacturing (R5.6-million), tourism (R2.4-million), retail (R8.9-million) and IT and aquaculture (R18.3-million).
A sizable chunk of loans went to businesses owned by women and youth, with R24-million loaned to youth and R21-million going to female-owned ventures.
Like last year, the Amathole District Municipality received the lion’s share of loans at 44%, with the least going to Cacadu District Municipality which received 1.5%. Nelson Mandela Bay got 14% of the share, an increase from last year’s 4.9%.
And, although there were significant challenges in rent collection, with only 76% collected, Mase said all other operational costs were kept within budgets.
Acting ECDC board chairman Professor Mkhalelwa Mazibuko said the financial review had a more favourable tone than it did two years ago.
He said the goal was to be profitable and pay the government dividends.
“We need a new funding and financing model to sustain us. We can’t go to Treasury every year cap in hand to ask for an allocation from the fiscus.”