Ithala's lending activities are undertaken through the Business Finance unit, which plays an integral role in meeting the organisation's core mandate of development and empowerment.
The Business Finance unit plays a catalyst role in facilitating development and empowerment for business enterprises domiciled in the province of KwaZulu-Natal. In playing this role, the unit carefully packages arious products and services to stimulate entrepreneurship, especially amongst the previously-disadvantaged individuals and communities, in keeping with the Provincial Spatial Economic Development Strategy as well as the primary mandate of Ithala in terms of the Ithala Act.
Developmental Lending
During 2009/2010 , the Business Finance unit underwent a rigorous turn-around process. The key import of the turn-around project was to enhance business processes to improve customer satisfaction, with the appropriate deployment of people and systems as the underpinning imperatives.
In the 2009/2010 financial year, the unit approved loans worth R 325,0 million to SMMEs and Co-operatives, and advances loans to the value of R 188,0 million. For the same period, 287 business enterprises were funded, creating 2 828 jobs. Compared to previous financial years, the unit posted a notable improvement on its entire loan book performance indicators. The R 325,0 million value of approved loans represents a 69% improvement from the prior year figure of R 192,0 million. Similarly, the value of advances constitute a 31% improvement on the preceding year. This level of performance is directly attributable to the turn-around project which focused on customer service, turn-around times, people skills and systems.
Ithala is a leading player in terms of Co-operative Lending, with the province accounting for 40% of all co-operatives across the country. In order to allow for perfection of the co-operatives model, minimal lending was undertaken in the co-operatives space during 2009/2010. The new lending model has now been developed and is being rolled out together with the Shareholder.
To add to the efficiency and quality of service provided by Ithala, the Business Finance unit was sectorised into five divisions, each focusing on a specific economic segment, namely Trade & Services, Manufacturing, Construction & Tourism, Commercial Property, Agriculture, and Agro-Processing.
To secure the loan book performance and the sustainability of funded projects, Ithala also introduced a Debt rehabilitation and Business Support unit. The mandate of the unit is to provide pre- and post-funding support. This is particularly important as some of the funded businesses are start-ups whilst others operate in difficult market conditions, making them more prone to default.
The five focus sectors are: