Eastern Cape small businesses receive millions in advanced loans
CAPE TOWN - A total of 190 Eastern Cape small businesses received R41.8 million in loan advances which facilitated the creation of 359 jobs in the 2018/19 financial year, the Eastern Cape Development Corporation said on Friday.
Announcing ECDC’s 2018/19 annual results on the back of an unqualified audit opinion in 2018/19, chief executive Ndzondelelo Dlulane said the average loan repayment rate was 80 percent in 2018/19.
A total of 359 jobs were facilitated through the loan funding instruments which included 186 youth jobs.
ECDC activities resulted in the facilitation of 3,969 jobs in 2018/19. A total of R23.4 million was advanced to businesses in the services sector, R17.2 million to those in construction, R1 million to manufacturing and R92,000 went to businesses in the agro-processing sector.
“Of the R41.8 million, R19,4 million went to businesses in the Amathole District Municipality and the Buffalo City Metropolitan Municipality. A total of R8.1 million went to those in Alfred Nzo, R6.4 million to businesses in OR Tambo, R4.7 million to those in Chris Hani, R2.5 million in Nelson Mandela Bay Metropolitan Municipality, R611,000 to Sarah Baartman and R50,200 to those in Joe Gqabi.
“Furthermore, ECDC is equally pleased with the development impact it has achieved in the last five-year strategy cycle. In the last six years, ECDC interventions resulted in the facilitation of 24,379 jobs. In the last six years, ECDC also advanced a loan funding total of R620.1 million to 1,402 Eastern Cape entrepreneurs,” said Dlulane.
Dlulane said from a finance perspective, ECDC’s financial position remains strong in that its total group assets exceed total group liabilities by R1.7 billion (Company: R1.6 billion). The driver for this positive book value is mainly an increase in the value of investment properties.
“The operating profit before fair value gains and investment revenue improved from an operating loss of R62 million in the 2018 financial year to a profit of R16 million during the year under review. This is attributed to both the cost-cutting measures that have yielded a decrease of R35 million in operating expenses as a result of the implementation of the financial recovery plan in October 2017, and the increased revenue received of R50 million for SMME financing,” Dlulane said.
He said ECDC also administers the Imvaba Co-operative Fund on behalf of government. In 2018/19, R9.3 million was approved for disbursement to 20 co-operatives. These co-operatives operate in the agriculture, apiculture, manufacturing and services sectors. In the last six years, a total of R92.3 million was approved for disbursement to 155 co-operatives.
The ECDC-administered Eastern Cape Jobs Stimulus Fund advanced a total of R8,080 million to businesses in distress which resulted in 808 jobs being saved. A total of 11 SMMEs benefitted from the incentive. The businesses are in manufacturing, business process, and outsourcing, aquaculture, agro-processing and tourism.
- African News Agency (ANA)