Ithala not out of the woods yetComment on this story
Ithala, the government’s development bank, has reduced its ratio of non-performing loans to 41 percent, but this is still a whopping R425 million of its current loan book of just over R1 billion.
In his R1.5bn budget presented in the legislature in Pietermaritzburg on Tuesday, Economic Development and Tourism MEC Mike Mabuyakhulu, who is the political head of Ithala, suggested that a turn-around strategy implemented by his department had brought some stability in the affairs of this bank.
He noted that, over the past few years, Ithala had experienced significant challenges across the spectrum of its business and development facilitation activities.
However, he said, his department had rung some changes, including the appointment of a new chairman, new board members and a chief executive officer.
Mabuyakhulu said the organisation was now finalising a comprehensive turn-around strategy that would enable the institution to deliver effectively on its mandate
“The turn-around strategy is already bearing some fruit. Ithala has decreased the ratio of non-performing loans in its loan book by bringing bad debts to 41 percent.
“While this amount still seems high, we are happy about the strides made considering that, until recently, it hovered at 80 percent
“This means that R181m in debts collected can, once again, be channelled back to its intended recipients – the fledgling co-operatives that require special attention”, said Mabuyakhulu.
In the past few years the bank has struggled to recover bad debts from its clients, resulting in millions of rand being written off as bad debts.
Mabuyakhulu has also stopped the policy of extending loans to politicians and their relatives.
However, unnamed politicians remain on Ithala’s loan book and still owed R27m. - The Mercury