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EC Development Corporation has supported small businesses with R106m in loans

Home Business Management Facilities Management EC Development Corporation has supported small businesses with R106m in loans

The Eastern Cape Development Corporation (ECDC) says it disbursed R106 million in loans and financial incentives to 529 small businesses in the 2022/23 financial year.

Announcing the development financier’s annual results, ECDC chief executive Ayanda Wakaba says the disbursed amount is comprised of R48 million in loans, R24 million from the Eastern Cape Jobs Stimulus Fund, R18,7 million from the Imvaba Co-operatives Fund, R4 million from the Small Towns, Rural and Township Enterprise Support Programme (STRTEP) and R11,3 million from the Informal Business Support Programme (IBSP).

“The 2022/23 financial year laid the basis for the ECDC to deepen and amplify its role as a high-performing development finance institution. The ECDC’s efforts were not only directed at the enhancement of its development finance mandate, but also toward the general financial health of the Corporation. The corporation is pleased with the eighth successive unqualified audit opinion it received in 2022/23. The ECDC balance sheet remains strong with total company assets exceeding total liabilities by R1,3 billion.

“The ECDC’s financial and non-financial support to deserving entrepreneurs is crucial to the development of thriving and sustainable regional economies. Loan repayments were R43 million, while an average collection rate of 95% was achieved for short-term loans. The value of loans disbursed was high due to high value loans disbursed in 2022/23 compared to the previous year. This indicates a sustained need for the loan facility. An amount of R32,5 million was disbursed to businesses in the services sector, R13,9 million to those in construction, and R1,3 million to enterprises in the manufacturing sector. These loan disbursements facilitated the creation and saving of 526 jobs,” says Wakaba.

The R48 million in loan disbursements went to 49 small businesses. A total of R17 million went to women-owned businesses, while R2,2 million went to businesses owned by youth.
Enterprises in the OR Tambo district received R21,9 million of the disbursements, R13,5 million to those in the Alfred Nzo district, R8,3 million to those in the Amathole district, R3,6 million to businesses in Nelson Mandela Bay, R325 216 in the Sarah Baartman district and R80 225 in Joe Gqabi.

The R24 million disbursed through the Jobs Stimulus Fund went to 55 businesses. Of this amount, R11 million was used to save 1,116 jobs. The Jobs Fund is intended to retain, save and protect jobs at risk in distressed businesses. A further R13 million was disbursed for working capital which helped the affected businesses to stay in business while saving jobs. The fund also referred approved businesses for non-financial support which helped identify the reasons for distress and to implement corrective measures.

Wakaba says in 2022/23, R16,7 million was approved for disbursement to 32 cooperatives. However, a total of R18,7 million was disbursed to 57 co-operatives which included commitments remaining from the previous year.

Furthermore, the ECDC also disbursed R11,3 million to 330 businesses in the form of equipment, machinery and tools through the Informal Business Support Programme. The programme provides support to informal businesses post the Covid-19 pandemic.
In addition, R4 million was disbursed to 38 businesses through the Small Towns, Rural and Township Enterprise Support Programme. The programme provides integrated support to formal and informal small businesses operating in rural, small towns and township localities.

The ECDC supported 242 businesses with direct business development services, while 1,442 people received additional business development services through training activities and business seminars.

“The ECDC also facilitated the creation of 1,615 jobs through its investment management, trade and investment promotion activities. The ECDC facilitated R5,2 billion in investments into the province while 28 critical skills training sessions in priority sectors were held.
“One of these investments is the R3,7 billion, 140-megawatt, EDF Renewables’ Coleskop Wind Farm which is under construction in the Chris Hani District Municipality. The ECDC also facilitated exports valued at R122 million. In addition, a total of 147 enterprises participated in export promotion activities organised and managed by the ECDC,” adds Wakaba.

In the creative industry, the Eastern Cape Craft Collection shop supported 111 businesses. At the end of 2022/23, shop sales were R442,000.

“In the property business, the ECDC’s rental billing increased by 6,6% to R129 million, rental collections increased by 7,8% to R88 million while rental collection as a percentage of billing increased from 57% to 64%.

“The disposal of non-core assets raised R55,9 million in the period under review. A total of R63 million had been raised from the disposal of 138 properties by the end of 2022/23.  The Corporation is pleased that it has regained control of 91formerly invaded properties. The occupants have been allowed to normalise lease arrangements with ECDC,” Wakaba explains.

In the infrastructure management services programme, ECDC generated R13 million in fees from external projects. The portfolio of external projects implemented by the ECDC was R442 million. Other projects worth R305 million were overseen through the Project Management Office appointment.

“The ECDC is also a proud host of the Economic Development Fund which was established in 2022/23. The fund has been institutionalised with a fund manager appointment. For 2023/24, the fund has been allocated R100 million to fund catalytic economic development projects, and for the extension of finance to Eastern Cape businesses, as well as priority sector value chain activation.

“Furthermore, the ECDC’s economic development coordination and sector support programme develops relationships with public entities and industry associations, the private sector and social agencies to effectively use resources and funding. In 2022/23, the programme raised R7,7 million in leveraged funding to support the implementation of catalytic projects,” Wakaba says.

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