Durban — The Ithala Development Finance Corporation (IDFC) and Sourcefin partnership is expected to invest R150 million into the KwaZulu-Natal economy through order financing and invoice discounting.
The IDFC Group chief executive Pearl Bhengu, said this was a major stride in supporting contractors to fulfil contracts as they celebrate the beginning of a partnership that will surely enhance the growth of small, medium, and micro enterprises (SMMEs) in KZN.
Bhengu said SMMEs operating in these areas are the backbone of the local economy and are most deserving of financial and non-financial support to help them start and grow sustainable enterprises.
“At Ithala, our mission is to foster economic development and create opportunities for all, especially those in rural and township areas. We believe that partners like Sourcefin enhance our efforts of driving innovative solutions to enable SMMEs to focus on creating jobs and contributing to the overall economic prosperity of KwaZulu-Natal,” Bhengu said.
She added that their role in this partnership was focused on ensuring that SMMEs have the resources and support they need to thrive:
– Firstly, facilitating access to finance:
IDFC will work hand in hand with Sourcefin to provide tailored financial solutions that meet the unique needs of SMMEs. By combining our expertise and resources, we aim to ensure that small business owners have access to the necessary funding to execute their contracts successfully.
– Secondly, enhancing financial literacy:
IDFC understands that financial literacy is key to the success of any business. Through this partnership, we will offer training and resources to help SMMEs make informed financial decisions. Empowering business owners with the knowledge they need is critical to their long-term success.
– Thirdly, capacity building and support:
IDFC is committed to providing capacity-building programmes that enhance the operational capabilities of SMMEs. Together with Sourcefin, IDFC will organise workshops, seminars, and mentorship programmes designed to support business growth and development.
– Lastly, leveraging networks and resources:
One of IDFC’s greatest strengths at Ithala is its extensive network and the resources it can mobilise. IDFC’s goal is to build a supportive ecosystem where businesses can flourish.
Bhengu said that she looks forward to a prosperous partnership that will drive economic development and support the growth of SMMEs in the KZN region.
The IDFC board chairperson, Sihle Mkhize, said the signing of a memorandum of understanding will pave the way for sustainable economic development and financial inclusion of SMME enterprises in our communities.
“Our funding solutions provide finance to enterprises operating in all sectors of the economy. This is done through a range of financial products which include working capital, asset finance, agricultural finance, procurement finance, franchise finance and structured lending,” he said.
Mkhize explained that in the past few years, the IDFC SMME funding business unit was experiencing an increased interest from clients seeking financial assistance to start or expand their businesses.
“In the 2023/24 financial year, we received 650 funding applications. Of these applications, 565 were approved, totalling R415.9m. Of the total funding approved, R170.8m was for procurement loans,” Mkhize said.
Mkhize said they had 15 MOUs with various organisations in the private and public sectors. These MOUs had enabled IDFC to finance SMMEs to the value of over R265m creating 2270 jobs.
Sourcefin CEO Joshua Kadish said he was proud to cement a first-of-itskind partnership in KZN. Kadish said they had already started on leads and applications.
“The reason why this partnership resonates with us is because we wanted to ensure that we can assist SMMEs since Covid-19 affected them,” he said.
Kadish added that they had started collaborating with major players in Gauteng.
Kadish said Sourcefin would provide free strategic training for SMMEs. This included legal, financial commitments – and that they will share knowledge with Ithala, especially in technology.
In conclusion, Kadish said that the people in KZN had demonstrated why this was the most resilient province; due to 16% of South Africa’s GDP coming from KZN.
“Despite this and its successes in certain industries, there is still a gap in SMMEs and hopefully this is addressed through this positive partnership,” Kadish concluded.
Representing the Department of Economic Development, Tourism and Environmental Affairs (Edtea), Sixtus Sibeta said their visit was to extend support as this partnership spoke directly to the priorities of the department. Sibeta believes it will go a long way to fight unemployment, poverty and inequality.
He added that Edtea had a few initiatives that would further contribute to assisting SMMEs and job creation. These were: the Eyesizwe Contractor Development Programme – which focuses on construction; the KZN revitalisation of township and rural economy; black industrialist programme and the Radical Agrarian Socio-Economic Transformation programme.
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