Johannesburg, South Africa, July 7, 2009—
IFC, a member of the World Bank Group, announced today it will invest in Sasfin to enable the financial services group to increase lending to South Africa’s small and medium enterprises, which often struggle to obtain funds from large commercial banks.
IFC’s investment will consist of up to $10 million in equity, a loan of $10 million, and up to $10 million in trade finance guarantees. Sasfin will use the funds to increase the products it offers to smaller businesses, strengthen its environmental and social lending practices, and boost foreign trade of South African companies.
IFC will also support Sasfin as it expands operations across South Africa and potentially to other parts of Sub-Saharan Africa, including as Malawi, Botswana and Ghana.
“The partnership with IFC will strengthen Sasfin’s capital position during these volatile economic times and help expand lending to smaller businesses, an underserved segment of South African society,” said Roland Sassoon, Chief Executive Officer of Sasfin. “Increased financing for small and medium enterprises is crucial for the sustainable development of South Africa’s private sector.”
IFC’s investment will provide Sasfin with long-term capital, which has become increasingly expensive and scarce as many institutions cut back credit lines amid the current global financial crisis. By increasing financial services for smaller businesses, the partnership will also help create jobs and boost economic growth.
“An inclusive financial sector is crucial for developing a vibrant private sector that promotes economic development and helps reduce poverty,” said James Scriven, IFC Director for Global Financial Markets. “IFC is committed to working with partners such as Sasfin to create more opportunities for South African businesses.”
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
.
