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
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.”
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.