Loans To Industry

Press, Volume CVIII, Issue 31776, 5 September 1968, Page 28

Loans To Industry

(From Our Own Reporter) WELLINGTON, Sept. 4.

The Development Finance Corporation approved 211 loans to industry totalling $1,480,000 in 1967-68, compared with 12 for a total of $1,193,000 the previous year, says it s annual report, tabled in Parliament today. The report says that on June 30, the end of the financial year, the corporation also had under investigation an additional eight loan applications for a total of $750,000. The figures published show that since its inception three years ago the corporation has approved a total of 41 loans for $3,432,000. Net profit for 1967-68 was $64,679, compared with $36,980 the previous year, but with the risk of losses greater than would normally be the case with other lending institutions, the directors deemed it prudent to make provisions of $50,000 for possible doubtful debts, and recommended that because the organisation was still in the "building up” stage, no dividend should be paid. MANAGER’S COMMENT

Commenting on the report, the general manager of the corporation (Mr S. Green-

berg) said It included reference to the small proportion of inquiries received from manufacturers seeking loan finance. The corporation was now taking steps to make its services better known to this sector.

The corporation was, he said, a statutory body with share capital held by the Reserve Bank, the trading banks and the insurance companies. It lent over medium or longterm periods to either new or expanding industries, and projects helped so far in-

eluded engineering, timber milling and processing, mining, fishing, aerial topdressing, foodstuffs, and primary processing.

Mr Greenberg said that when it made advances, the corporation gave consideration to the value of the industry concerned to the economy, and the extent to which it would increase production, increase exports, save imports or assist an area requiring development

Particular attention was given to the needs of small and medium-sized businesses. "The corporation’s policy is to supplement, and not compete with, existing financial services, so borrowers need to show that the necessary finance is not available elsewhere on reasonable terms and conditions,” Mr Greenberg said. Of particular interest in the accounts was that outstanding advances had increased from $1,027,810 to $2,415,640, and that undistributed balances of loan commitments were $911,000. Finance for these advances had been supplied by equity share capital of $501,500, Government debenture worth $1,000,000, and guaranteed bonds from public subscription totalling $1,500,000.