Thursday, September 11, 2008

SwaziBank, IDC sign E100m loan agreement

SWAZIBANK has signed an agreement for a E100 million loan from the Industrial Development Corporation (IDC), a South African finance institution.

This transaction, which has been hailed as a milestone that would hopefully mark the beginning of an ongoing relationship between the two financial institutions, aims to boost SwaziBank's existing capacity for provision of development finance for sustainable projects initiated by Swazis.

Speaking during the signing ceremony at the bank's headquarters yesterday, Managing Director Stanley Matsebula said the E100 million line of credit received by SwaziBank marked a historic event with the two institutions joining hands to develop the country's economy.

"As you might be aware, the bank has a big and inherently risky mandate of providing development finance," he said, "with such a big mandate and our good ability to mobilise public deposits, financial resources become limited and that is where IDC has come in handy."

SwaziBank finances various sectors including tourism, infrastructural development, agriculture, corporate business, small and medium enterprises (SMEs) and currently looking into the mining sector for more opportunities.

"We have no doubt that the E100 million that has been made available by this credit line extension will make a significant impact on the economy of Swaziland, especially because it is meant for the benefit of SMEs and corporates, who are critical players in stimulating the economy of Swaziland," said IDC CEO Geoffrey Qhena.

He said areas such as tourism infrastructure, power generation and sugar cane production were expected to benefit from these resources. Adding, Qhena said it was also expected that the benefit to Swazis would be evident in the potential 2 500 jobs that would be created as well as the inflow of foreign currency that would stem from the boost to the tourism sector.

Meanwhile, Matsebula said the country's economic growth was relatively low and yet with its mandate, the bank had to finance numerous sectors in order to boost economic growth and create more jobs.

"Obviously, these developmental and business challenges need enormous financial resources. Because of our huge mandate, which we appreciate and respect, we began a fundraising exercise domestically, regionally and internationally.

"With this line of credit from IDC our funding ability will be further enhanced. SwaziBank is by far the major funder of medium to longer term development projects and we have disbursed funding worth no less than E4 billion in the last eight years," said Matsebula.

"We are quite certain that with IDC's greater involvement in the economy of Swaziland, we will both tackle issues of lack of good economic growth, unemployment and reduction of poverty in the country."

. . . Support in line with SADC FTA

INDUSTRIAL Development Corporation (IDC) Chief Executive Officer Geoffrey Qhena says the transaction would certainly further the aims of not only developing Swaziland, but the Southern African Development Community (SADC) region's economy.

He said the IDC was mandated with the very challenging task of stimulating economic development to the benefit of the citizens of the African continent.

"With regards to our activities outside South Africa specifically, our reason for being active participants in Africa's economic development is premised on the understanding that, in order for SA's economy to continue to grow and prosper on a sustainable basis, the economies of its sister African countries, particularly those in the SADC, must also grow and prosper," he said.

Qhena noted that this had been further enhanced by the recently launched SADC free trade area (FTA), which he said, had culminated from the realisation and recognition that a country cannot fully grow and prosper without its neighbours doing the same.

He said the IDC funds a number of sectors , largely 14 of them, which include wood and paper, ITC, tourism, construction, transport and financial services, agriculture, mining and others.

"Over time we've been able to understand the sectors deeply, what drives them, the challenges they face and how to develop them," said Qhena. He said one of the IDC's key objectives was to promote entrepreneurship with the intention of achieving outcomes such as economically sustainable growth, sustainable income and regional economic integration on the continent.