The Industrial Development Corporation (IDC) said on Thursday it had approved R1,4-billion in loans to distressed companies during last year’s recession.
The IDC is a state-owned development finance institution that lends to the private sector at more favourable rates and terms than commercial banks, with the aim of increasing the number of medium-sized enterprises and creating jobs.
The government asked the IDC to support struggling firms as South Africa experienced its first recession since 1992, especially in the manufacturing sector, which was hit hard by the downturn.
“The take-up for the distressed funding was lower than anticipated. Plans are in place to address this with industry workshops and other forums that will be implemented in the current year,” chief executive Geoffrey Qhena said in a statement.
Total loan approvals for the financial year ended March 2010 fell to R9,4-billion, compared with R10,8-billion the previous year.
“The IDC intensified its lending activities and continued its focus on economic expansion with 65% of new funding approved allocated to start-up companies or expansionary activities,” the company said. — Reuters