|
Johannesburg, South Africa, January 13, 2009—
IFC, a member of the World Bank Group, announced today that it has invested 350 million South Africa Rand (about $36 million) in African Bank Limited to increase loans for education and housing, two important sectors for South Africa’s sustainable, long-term economic growth.
IFC’s loan will qualify as Tier II capital, strengthening African Bank’s balance sheet and capital base. The bank will use the funds to increase lending to low and middle income clients who face significant challenges accessing financial services, and to offer new loan products for home improvement and education. More than half of the bank’s current loan disbursements are used for education and housing.
“African Bank has over the years put in place a strong risk-management structure and culture that has enabled it to succeed in a market segment that many perceive to be high risk,” said Dave Woollam, African Bank’s CEO. “Working with IFC will enable African Bank to increase financing and optimize our cost of capital, helping bring down credit costs for our clients and improving our product range to better support two important segments of South Africa’s economy.”
The rand-denominated loan is structured using the swap market. By utilizing swaps, IFC will be increasing the liquidity and depth of the swap market, providing financing that mitigates the foreign exchange risk of South African companies, and supporting capital market development.
“Improving access to finance is an important part of IFC’s strategy to strengthen the private sector in Sub-Saharan Africa,” said Saleem Karimjee, IFC Country Manager for Southern Africa. “IFC is committed to supporting strong financial institutions that continue to bring financial services to more people and places amid the recent turmoil in global markets.”
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, visit
www.ifc.org
.
About African Bank
African Bank is a wholly owned subsidiary of ABIL, a publicly quoted bank-controlling company listed on the Johannesburg Stock Exchange with a market capitalization of approximately R22 billion ($2.3 billion). ABIL’s purpose is to provide its clients who are largely in the low-middle-income market with unsecured credit that is affordable, responsible and convenient. It does this by unlocking access to credit through risk innovation, growing successful initiatives to market dominance and driving down the cost of credit. The ABIL group now services approximately 2.4 million clients and had gross advances totalling R20.9 billion ($2.2 billion). For more information, visit
www.abil.co.za
.
|
