20 May 2009
South Africa’s Industrial Development Corporation has received a US$50-million (about R422.2-million) loan from the China Construction Bank (CCB), which it will use to increase its general lending capacity and recapitalise its export finance book.
IDC chief executive Geoffrey Qhena said demand for lending had increased tremendously due to the global economic downturn, prompting the state-owned lender to source funding from the international market.
“Over the past year, our units have been receiving an unprecedented amount of applications, so we have seen it fit to also go out and source funding so that we can increase our capacity to lend,” Qhena said in a statement this week.
“We also have an export loan book, which we believe this CCB loan will assist in recapitalising, since the demand for export funding has also increased from our front.”
While this is the first facility the IDC has had with the China Construction Bank, which has a local office in Johannesburg, Qhena said it was a first step towards establishing a long-lasting relationship with the Chinese lender.
CCB-Johannesburg GM Yimin He said he believed it was important for the local CCB branch to play a support role for business in South Africa, in light of the negative impacts of the global economic downturn.
“We see our facility with the IDC as a milestone for our mutually beneficial relationship, and look forward to further enhancing our cooperation in the near future.”
Last week, the IDC secured a €60-million (about R690.9-million) credit line from the European Investment Bank to finance viable projects by small and medium enterprises (SMEs) in the industrial, resources and services sectors.
Would you like to use this article in your publication or on your website? See: Using SAinfo material