Significant steps have been taken to ensure that development financier the Eastern Cape Development Corpor-ation (ECDC) attains improved self-funding and financial stability over the medium to long term.

This is according to ECDC CEO Sitembele Mase who stated at the financier’s 2013/14 financial results presentation in East London last month that the financial year was charac-terised by a sustained effort to establish a basis for clean administration and rekindle public confidence in the ECDC.

The ECDC recorded sizeable returns on its investment and a fifth consecutive unqualified audit opinion for the financial year, which Mase said instilled public confidence.

As part of its strategic viability model, the ECDC reviewed its funding structure and decided to disinvest from noncore and nonper-forming assets.

ECDC deputy chairperson Mkhalelwa Mazibuko stated at the results presentation that certain areas of the ECDC would be improved, which would constitute doing away with certain aspects that were affecting the company.

This includes assets such as residential properties and certain subsidiary investments that have “hurt and threatened the viability of the corporation”.

The ECDC has disposed of some of its residential properties, valued at R6.5-million, and it intends to dispose of its entire stock of 238 standalone houses, which have a balance sheet value of R110-million.

So far, 113 offers have been received and, in the new financial year, the ECDC will expedite the process of a public disposal of its 21 vacant houses, with an expected selling value of R12-million.

“The industrial property space is still going to support the growth of high catalytic projects and we cannot completely dispose of them. We also have to take a considered view on industrial estates,” Mase stated.

He noted that this plan was a platform to develop a solid foundation for critical elements for self-funding and a financially viable entity by 2015/16.

The ECDC expects to add R600-million to its coffers through the disposal of its noncore and underperforming assets, which it believes will increase capitalisation to R1-billion over the next three years.

This will be used solely for the funding and investment of high-performing investments to create alternative sources of revenues and promote economic development for the Eastern Cape.

During the 2012/13 financial year, the ECDC approved R145-million for disbursement to small businesses, compared with R139-million in the previous year.

Of this, R130-million was granted to 496 enterprises, also a significant improvement from the R75.1-million granted to 330 businesses in the previous year.

At least R172-million in loan repayments was collected, up by R81-million form the previous year. Mase noted that this significant amount in repayments resulted in the facilita- tion of creating and salvaging 1 849 jobs.

The ECDC also indicated that improved operational efficiencies resulted in the reduction of loan impairments of R16.8-million, compared with the previous year’s R31.7-million.

“This is attributable to the improved monitor- ing of loans and vigilant due diligence processes at origination. The ECDC is equally delighted that a sizeable number of loans went to businesses owned by youth and women. A total of R24-million, or 129 loans, was granted to youth and R21-million, or 113 loans, went to businesses owned by women,” said Mase.

The ECDC has also made significant strides in improving its loss position by 58.7%. It recorded a loss of R20.5-million for this financial year, compared with R49.7-million in the previous year, and it attributed this improvement to increases in the fair value of investment property and grant income from the Department of Economic Development and Environmental Affairs and Tourism.

Growth in the value of its investment property has resulted in a net assets value position of R956-million for the ECDC’s balance sheet.

Third-party funding for development projects attracted R77-million and Mase stated that this was crucial, as it enabled the ECDC to share risk with other public-private partners.

“This means the corporation is able to mobilise funding from other agencies when it cannot meet demand from its own funds. This ultimately contributes to an enhanced development impact, as opposed to what ECDC can achieve on its own,” added Mase.

The corporation also secured investments totalling about R617-million from 22 investments during the review period and the value of trade facilitated by the corporation stabilised at R1.5-billion in the same period.

The ECDC also generated 37 new exporters in the review period, compared with 11 of the previous year. A significant increase was also recorded with regard to the 144 existing exporters assisted, compared with 40 in the previous year.

“The aim of the ECDC is to be an investment catalyst in the Eastern Cape to create jobs and develop this economy. We will use funds to also invest in new sectors in the economy,” Mase concluded.