IDC will give merged SMME entity R921m

2011-11-05 12:15

The Industrial Development Corporation (IDC) will provide a R921 million shareholder loan to the three state development finance institutions whose merger was announced last week.

The money will be allocated over three years.

The IDC would be able to borrow from the market on behalf of the merged entity, said Economic Development Minister Ebrahim Patel.

Patel announced last week that the South African Micro-Finance Apex Fund (Samaf), the Small Enterprise Development Agency and Khula Enterprise would become one firm in April next year.

He said the R921 million loan would bankroll the first phase of the merger.

Patel said in subsequent phases the new entity would look at incorporating and aligning with other national and provincial government financial entities that provided finance to small businesses.

“In addition, work will be done to ensure that there is alignment with the Small Enterprise Development Agency, which provides small businesses with non-financial support,” he said.

“This is due to the reduction in the number of executives required in the combined institution, the co-location of the provincial operations and the synergies with the IDC,” said Patel, adding that details on the merged entity’s new corporate identity would be released in due course.

Patel added that the key product of the merged entity would be direct lending to small businesses, in addition to the existing wholesale loans provided by Khula and Samaf.

“Details of the financial products offered to the SMME community will be announced once the organisation is launched.”

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