IDC launches R1.5bn post-unrest funding package
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SOUTH African national development finance institution, the Industrial Development Corporation (IDC), has launched a R1.5 billion funding package in response to the civil unrest, looting and destruction of property that occurred in parts of the country last month, bringing many businesses to their knees.
“Our exposure to key sectors of the economy and feedback from our affected client base spread across the country, particularly in KwaZulu-Natal and Gauteng, gave us insights into the impact on business activity,” said IDC chief executive TP Nchocho.
He said he was particularly concerned about the lasting impact of the unrest on local and regional supply chains. According to him, export orientated businesses in KwaZulu-Natal might lose out on opportunities in the long term if business confidence remained affected.
The IDC’s R1.5bn post-unrest business recovery package includes funding support for businesses and communities impacted by the unrest. This package was a part of the R3.75bn comprehensive economic recovery package recently announced by the Minister of Trade, Industry and Competition, Ebrahim Patel.
The Department of Trade, Industry and Competition (DTIC) said yesterday that the economic recovery package was now open for affected businesses to apply for funding.
Of the IDC’s total package, R1.4bn was earmarked to assist businesses (existing and new clients) in select sectors. The funding would be available at concessionary rates to give businesses a better chance to rebuild.
Bridging loans for insurance payouts would be offered at 0 percent, with other debt facilities priced at prime plus 1 percent.
The IDC said it had also set aside a R100 million regional programmes grant for technical and financial assistance to small businesses in townships, rural areas and small towns affected by the unrest and associated supply chain disruptions.
In Gauteng, the IDC said it would partner with the Gauteng Enterprise Propeller, which has set aside R50m to co-invest with IDC on the proposed R100m funding grant. In addition, the IDC would administer the DTIC’s R400m Manufacturing Competitiveness Enhancement Programme Economic Stabilisation Fund.
The fund would support manufacturing companies affected by the unrest, including those impacted by associated supply chain disruptions. The fund would offer concessionary funding to affected companies through interest-free loans.
Through its corporate social investment (CSI) programme, the IDC said it had allocated R10m towards food and social security and recovery efforts in affected communities. This funding would cater for school infrastructure rebuilding and support for care facilities and clinics.
“Our CSI response will focus mainly on rural, outlying and less developed areas that now face increased vulnerability. We will be working with our established NGO partners to ensure reach and impact,” Nchocho said.