Johannesburg, November 5, 2007 —
IFC, a member of the World Bank Group, has launched the South Africa SME
Banking Program to help local financial institutions develop the capacity
to identify and meet the needs of the country’s small and medium enterprises.
The program is expected to help some 500 local small and medium entrepreneurs
gain access to financing through new, customized products that will be
offered by local financial institutions.
The program was announced today at a knowledge-sharing event for South
African financial institutions held at the Hilton Sandton Hotel. The event
focused on the role of regulation in influencing the demand and supply
of SME financial products. It attracted over 50 representatives, mainly
from the financial sector, and featured presentations by regulatory experts
from IFC, China, and Indonesia.
“With this program, our aim is to demonstrate the viability of the small
and medium enterprise segment, and to encourage more financial institutions
to reach out to this market,” said Bernard Chidzero, General Manager,
IFC Private Enterprise Partnership for Africa.
According to Chidzero, the South Africa SME Banking program – a three-year
advisory services program – will help support and accelerate lending to
small and medium enterprises in the country.
SMEs make up the largest share of employment in South Africa and many other
developing countries, and are often the foundation of the private sector.
The entrepreneurs behind them could—and should—play a larger role in
development, but are held back too often by limited access to financing
from local, formal sector financial institutions.
Under the program, IFC will work with financial institutions, credit reporting
companies, and local business service providers, with a focus on three
Improving the national credit reporting infrastructure to provide lenders
with the information they need to assess credit risk for smaller businesses
Supporting individual banks and nonbank financial institutions to expand
financial services to small and medium enterprises, particularly black-owned
and women-owned businesses
Linking banks and credit bureaus to business development service providers
to enable them to develop specialized programs and products that target
small and medium businesses.
IFC, a member of the World Bank Group, fosters sustainable economic growth
in developing countries by financing private sector investment, mobilizing
private capital in local and international financial markets, and providing
advisory and risk mitigation services to businesses and governments. IFC’s
vision is that poor people have the opportunity to escape poverty and improve
their lives. In FY07, IFC committed $8.2 billion and mobilized an additional
$3.9 billion through loan participations and structured finance for 299
investments in 69 developing countries. IFC also provided advisory services
in 97 countries. For more information, visit www.ifc.org.