IFC invests in African Bank to Boost Education and Housing Loans in South Africa
In Johannesburg:
Houtan Bassiri
Phone: +27 (11) 731 3179
E-mail: hbassiri@ifc.org
In Washington, DC:
Lotte Pang
Phone: +1 (202) 458-0952
Email: lpang@ifc.org
Johannesburg, South Africa, January
13, 2009—IFC, a member of the World Bank Group, announced today that
it has invested 350 million South Africa Rand (about $36 million) in African
Bank Limited to increase loans for education and housing, two important
sectors for South Africa’s sustainable, long-term economic growth.
IFC’s loan will qualify as Tier II
capital, strengthening African Bank’s balance sheet and capital base.
The bank will use the funds to increase lending to low and middle income
clients who face significant challenges accessing financial services, and
to offer new loan products for home improvement and education. More than
half of the bank’s current loan disbursements are used for education and
housing.
“African Bank has over the years put
in place a strong risk-management structure and culture that has enabled
it to succeed in a market segment that many perceive to be high risk,”
said Dave Woollam, African Bank’s CEO. “Working with IFC will enable
African Bank to increase financing and optimize our cost of capital, helping
bring down credit costs for our clients and improving our product range
to better support two important segments of South Africa’s economy.”
The rand-denominated loan is structured
using the swap market. By utilizing swaps, IFC will be increasing the liquidity
and depth of the swap market, providing financing that mitigates the foreign
exchange risk of South African companies, and supporting capital market
development.
“Improving access to finance is an
important part of IFC’s strategy to strengthen the private sector in Sub-Saharan
Africa,” said Saleem Karimjee, IFC Country Manager for Southern Africa.
“IFC is committed to supporting strong financial institutions that continue
to bring financial services to more people and places amid the recent turmoil
in global markets.”
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.
About African Bank
African Bank is a wholly owned subsidiary of ABIL, a publicly quoted
bank-controlling company listed on the Johannesburg Stock Exchange with
a market capitalization of approximately R22 billion ($2.3 billion). ABIL’s
purpose is to provide its clients who are largely in the low-middle-income
market with unsecured credit that is affordable, responsible and convenient.
It does this by unlocking access to credit through risk innovation, growing
successful initiatives to market dominance and driving down the cost of
credit. The ABIL group now services approximately 2.4 million clients and
had gross advances totalling R20.9 billion ($2.2 billion). For more information,
visit www.abil.co.za.
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