Johannesburg, South Africa, 29 January
2018 – IFC, a member of the World Bank Group, has announced that it
will extend a seven-year R740 million term loan to Mercantile Bank Limited,
to allow the bank to grow its lending to South African small and medium
enterprises, with a focus on women-owned SMEs.
The financing falls under the IFC SME Push
Program, an initiative to expand lending and strengthen support for small
and medium enterprises by the formal banking sector. The SME Push Program
will channel up to R40 billion ($3 billion) investment into South African
SMEs over the next 5-7 years through a comprehensive package, including
investments, risk-sharing facilities and advisory services. The program
was developed to complement government policies promoting lending to small
and medium enterprises and to spur job creation in South Africa.
IFC support will promote Mercantile Bank’s
efforts to sustainably grow the SME business and contribute more effectively
to boosting productive economic activity and job creation. Mercantile Bank
is promoting the development of local entrepreneurs and expanding its support
to female business owners and to those from previously disadvantaged groups.
Over the past five years, the bank has doubled its lending to SMEs and
with this loan, will be positioned to have a positive impact on an even
larger segment of the sector.
“It is encouraging to see that an institution
like IFC recognises the opportunity for growth in South Africa, despite
the current tough economic climate. Mercantile is also very proud of the
continued confidence IFC has shown in the bank over an extended period.
This loan will not only allow us to assist other businesses, but also enable
us to expand our own business further,” said Karl Kumbier, the Chief Executive
Officer of Mercantile Bank.
IFC Country Manager Saleem Karimjee said,
“IFC welcomes the opportunity to boost Mercantile Bank’s impact within
the SME community, especially its outreach to female entrepreneurs, who
are still under-represented in the local market.
IFC’s SME Push program is achieving good
traction among South African financial institutions. With its unique market
position and business focus, Mercantile Bank is an excellent partner in
our quest to make a dent on South Africa’s unemployment challenge by offering
access to finance to underserved and black-owned SME’s.”
IFC and Mercantile concluded a landmark securitisation
transaction in 2014. Valued at R240 million, it saw the securitisation
of Mercantile Rental Finance contracts and was the first of its kind in
sub-Saharan Africa. Mercantile is also one of only two South African banks
to be upgraded by Moody’s in 2017 and the agency has placed the bank on
positive review for a possible further upgrade.
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work with more than 2,000 businesses worldwide,
using our capital, expertise, and influence to create markets and opportunities
in the toughest areas of the world. In FY17, we delivered a record $19.3
billion in long-term financing for developing countries, leveraging the
power of the private sector to help end poverty and boost shared prosperity.
For more information, visit www.ifc.org