The Industrial Development Corporation of South Africa (IDC).
The Industrial Development Corporation of South Africa (IDC) is a state-owned, self-financing, Development Finance Institution (DFI). It was established in 1940 to promote economic growth and industrial development in South Africa.
Its primary objectives are to contribute to the generation of balanced, sustainable economic growth in Africa and to the economic empowerment of the South African population, thereby promoting the economic prosperity of all citizens. The IDC achieves this by promoting entrepreneurship through the building of competitive industries and enterprises based on sound business principles.
The IDC operates in a broad spectrum of industries and with specialised knowledge and experience; it is able to offer valid and appropriate financial assistance to a wide variety of individuals and companies.
The major objective of the IDC is:
* To support industrial development capacity and to promote entrepreneurship.
The IDC employs the following strategies to achieve its objectives:
* Serving as a catalyst for balanced, sustainable development.
* Identifying and supporting opportunities not addressed by the market.
* Providing risk capital in partnership with the private sector.
* Building on its skills and industry knowledge to add value to entrepreneurs and businesses.
* Optimising its financial management.
How IDC supports sustainable economic growth and development:
* The IDC identifies and funds projects through partnerships.
* The IDC focuses on promoting and investing in viable new industries.
* The IDC differentiates itself through risk-taking and flexibility in structuring.
* IDC’s industry development role takes into account the specific needs of the country such as employment, development of rural areas, beneficiation, exports, etc.
IDC seeks to achieve the following outcomes:
* Creating sustainable employment opportunities.
* Increasing sectoral diversity in the economy.
* More equitable regional economic activity within the country.
* Assisting small and medium enterprises.
* Assisting new entrepreneurs entering the economy.
* Ensuring broad-based black economic empowerment.
* Contributing to the industrialisation of the rest of Africa.
• Promoting environmentally sustainable growth.
* While ensuring that it remains financially sustainable.
IDC approach to regional development:
* Unlocking investment potential to address inequitable regional socio-economic development.
* Exploiting comparative advantage in sectors.
* Addressing market gaps.
* IDC in discussion with provincial development corporations to address capacity building.
* Capacity building for third-tier government through development agencies: serve as a support and resource facility to fulfil IDC’s developmental role through the establishment of agencies (particularly in rural areas).
IDC offers a wide array of financial instruments, including:
* Commercial debt (loans).
* Equity (shareholding).
* Quasi-equity.
* Share warehousing
* Wholesale and bridging finance.
* Guarantees.
* Export/import finance.
* Short-term trade finance.
* Venture capital.
IDC financing criteria:
* Financial assistance is provided for the development of new projects, expansions or rehabilitation of existing projects.
* Projects must exhibit economic merit (ie, profitable).
* IDC finances fixed assets and fixed portion of growth in working capital requirements.
* Reasonable contribution expected from promoter/s.
* R1 million minimum.
* Security.
* Environmental compliance.
IDC role in project development:
* Co-sponsors feasibility studies.
* Identifies project opportunities.
* Provides and arranges funding (eg, export and import finance, equity and loan funding).
* Identifies suitable international and local DFIs, commercial and merchant banks and companies and export credit agencies as potential participants.
* IDC acts as a financial adviser in partnership with other financial institutions.
* Shares project risk with the sponsors and financial partners.
* Identifies strong operating partners.
* Off-take and supply agreements.
IDC Business support to SME sector:
* Providing greater pre-investment support for high potential/high impact investments.
* Closer monitoring of clients.
* Providing technical support post-investment.
* Focused training to meet needs of specific entrepreneurs.
* Providing generic training and systems to support new entrepreneurs.
* Encouraging the development of women entrepreneurs.
* Encouraging the development of disabled entrepreneurs.
IDC funding BBEEE:
* IDC, as a major South African DFI, remains fundamental to the national agenda to realise BBBEE objectives.
* IDC has developed critical skills and experience in financing BBBEE.
* To augment these BBBEE objectives and remain a significant player in BBBEE funding, job creation and BBBEE remain the overarching factors in all its funding activities:
- Facilitate ownership of businesses.
- Ensure transfer of skills to enhance management capacity and entrepreneurship.
- Advancement of HDSA employees (share and/or profit participation).
- Employment equity.
- Procurement policies.
- Women advancement in business.
For more information contact Mphilo Dlamini, Industrial Development Corporation of South Africa (IDC), +27 (0)11 269 3293, [email protected], www.idc.co.za
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