The Eastern Cape Development Corporation (ECDC) says 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.
Announcing ECDC’s 2018/19 annual results on the back of an unqualified audit opinion in 2018/19, chief executive officer Ndzondelelo Dlulane says the average loan repayment rate was 80% in 2018/19.
A total of 359 jobs were facilitated through the loan funding instruments which includes 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,” says Dlulane.
Dlulane says 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,” says Dlulane.
Dlulane says 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. In the last six years, 3,440 jobs at 47 companies were saved from a R34,4 million Jobs Fund incentive.
A total of 2,208 SMME’s received enterprise development services in 2018/19. During the period under review, 228 enterprises received compulsory direct business development services in 2018/19. Of this number, 99 (44%) were women-owned businesses and 88 (39%) were youth-owned businesses. In the last six years a total of 1,775 SMMEs received non-financial support services.
“In 2018/19, ECDC placed special emphasis on the pursuit of trade, investment and innovation initiatives which should improve the overall global competitiveness of Eastern Cape entrepreneurs. ECDC facilitated R292 million in local and foreign direct investment into the province. A total of 19 development projects were facilitated while 172 local entrepreneurs received integrated export support. ECDC participated in 19 trade, investment missions and expos. A further 203 people received critical skills training. A total of 1295 jobs were facilitated through trade, investment and innovation activities. In the last six years ECDC facilitated a total of R4,5 billion in local and foreign direct investment,” Dlulane says.
ECDC rental income increased to R72,7 million. In the last six years, rental income was R419,2 million. During the period under review, the strategic projects unit implemented four projects valued at R67 million.
The slowing economy resulted in ECDC pursuing high-value, high-impact long-term projects which act as a catalyst for improved economic activity. Therefore, ECDC played a central role in prioritising the revitalisation plans of industrial parks which were once the drivers of regional economies across the Eastern Cape.
“ECDC also implemented the R50 million Dimbaza Industrial Park security upgrade. Implemented with funding from the Department of Trade and Industry (thedti), the upgrades are the first phase of the overall redevelopment of the industrial park. The whole security upgrade involves establishing high security fencing and controlled access. These are designed to service the existing tenants and to attract new tenants. Included in the upgrades is the installation of high mast lights. The project commenced in the period under review and it is due for completion in the new financial year. By the end of 2018/19, 33 jobs were created at the project.
“Moving forward, ECDC will consolidate and improve mandate delivery to ensure that economic development is real through the provision of real finance, real resources and real investment,” ends Dlulane.
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