Today, First National Bank (FNB) announced that a loan agreement in the amount of $200 million (around R2.6 billion) was concluded between FNB parent, FirstRand, and the International Finance Corporation (IFC) a member of the World Bank Group.
The loan is aimed at magnifying lending and support for the SME sector in South Africa.
In an effort to promote growth of the SME sector, the IFC has developed the SME Push Program to channel $2-3 billion (around R26-39 billion) of a wide range of investment into South Africa’s SMEs over the next 5-7 years.
“SMEs are one of the most powerful contributors to sustainable economic growth. In South Africa, the sector contributes about 40% to the country’s GDP,” says Mike Vacy-Lyle, CEO of FNB Business.
The National Development Plan 2030 estimates that South Africa needs to have 8 million active SME’s in order to achieve set targets of creating 11 million jobs by 2030. According a press release by the bank, the SME Push Program is designed to align with government policies in order to assist in gearing South Africa towards these set goals.
Oumar Seydi, IFC Director for East and Southern Africa said, “IFC’s is committed to promoting the growth of SMEs to spur job creation at a time of economic uncertainty in South Africa, and globally. IFC welcomes this opportunity to help FNB expand its efforts to work with SMEs, and build on a long-term strategic partnership that can increase access to finance IFC’s SME Push Program.”
“FNB is well positioned to offer the right support to the SME sector. Regardless of the current economic slowdown, we believe that SMEs still represent a massive growth opportunity. Together with the IFC we can collaborate in crafting an era of economic and social development and help shape the county’s growth prospects,” concludes Vacy-Lyle.
