via IDC sets up finance division to fund industries October 30, 2014
THE Industrial Development Corporation (IDC) is mobilising funds for its new division which will provide medium and long-term finance for industries, an executive has said.
IDC general manager Mike Ndudzo said the corporation had set up the IDC finance division headed by one of its managers.
“We need a lot of money. We have to start slowly depending on what we require. We are approaching development finance institutions such as India
Eximbank, China Eximbank and others to see if we can start to mobilise medium to long-term funding,” he said.
“We have approached development finance institutions in particular from the Brics [Brazil, Russia, India, China and South Africa] to see if they can give us lines of credit. The big trigger now is to mobilise funding for the division.”
He said IDC would approach Treasury on Distressed Marginalised Areas Fund and Zimbabwe Economic and Trade Facility Fund so that its new finance division would administer those funds.
“We will request that the partners for the funds subscribe and can consider ceding the money to us and we can act as an agent and administer those funds,” he said.
The new division is already provided for in the IDC Act.
The government set up the new unit this year as a move to resuscitate ailing industries.
IDC was nominated to facilitate funding of institutions through the Zimbabwe Agenda for Sustainable Socio-Economic Transformation.
Industry requires over $5 billion for working capital and recapitalisation and is facing various challenges that include poor infrastructure, power and water challenges, unfavourable labour laws and low capacity utilisation levels that are at 36,3%.
So far this year, over 4 000 people have been laid off as companies continue to struggle due to low demand of products by consumers.
Companies contend that the business environment is difficult as they are facing stiff competition from imports.
Others argue that the multi-currency regime has also created more challenges for local industry as their goods are expensive as compared to imports due to the high cost of production obtaining locally.
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