Reverend Musa Zondi, the Economic Development, Tourism and Environmental Affairs MEC. Picture: Doctor Ngcobo / Independent Newspapers
The eThekwini Municipality’s intentions to enter into a three-year R20 million partnership with Ithala Development Finance Corporation (IDFC) has been put on hold.
At a Full Council meeting in December, the municipality stated that both parties intended to cooperate with each other, to support Small, Medium, and Micro Enterprises (SMMEs) with financial and non-financial support services, and to continue with the long-term relationship between the parties.
Now controversy surrounds the Ithala Bank as it prepares to face the Prudential Authority (PA) over claims of alleged insolvency and non-compliance.
In the municipal report, the city and Ithala were expected to provide R20 million each year, for SMME development programmes.
eThekwini Municipality spokesperson, Gugu Sisilana, said the city will not enter into the discussion regarding Ithala’s legal matters.
“If there is an update regarding the intended partnership and how it will be implemented, this will be communicated at the appropriate time and at the relevant Municipal Committees before it is again brought back to Full Council,” Sisilana said.
KwaZulu-Natal Economic Development, Tourism and Environmental Affairs MEC Reverend Musa Zondi said on Tuesday that the MoA will not take place until the Ithala court matter is resolved.
The programme aimed to provide collective and efficient support to SMMEs to ensure that the entrepreneurs are competitive in the markets and participate positively in the mainstream economy.
The report stated that the purpose of the Memorandum of Agreement (MoA) will establish a working relationship between the IDFC and the municipality, which will set out the mechanisms for the implementation and monitoring of the areas of collaboration for SMME development.
The MoA also aims to enhance the commitment of both parties to realise the objectives of strengthening the participation of SMMEs in the mainstream economy.
The municipality intended to avail a budget of R20 million per financial period for three years, which would have been transferred directly to the IDFC, which would then have to administer the funding to provide SMMEs with financial and non-financial support services, with SMMEs applying directly to Ithala Bank.
The programme also aimed to integrate women and youth-owned businesses in rural and township areas into the SMME development programmes.
zainul.dawood@inl.co.za