Ecsponent secures R700 mln loan from Afreximbank
JOHANNESBURG – African financial services provider Ecsponent said on Monday it had concluded a term sheet with the African Export-Import Bank for an R700 million dual-tranche medium-term loan facility.
The provision of the facility is subject to standard conditions, including due diligence and investor committee approval.
The loan will support Ecsponent’s lending activities to its growing small and medium-sized enterprises (SME) portfolio, reduce funding costs and improve profitability.
"The transaction is in line with the company’s ongoing efforts to diversify and grow its funding sources and to strengthen its ability to service its growing credit operations, focused towards SMEs in South Africa and neighbouring countries," the company said.
Ecsponent’s credit operations provide the company with short- and medium-term profitability and have to date been funded through a combination of its preference share and domestic medium-term notes programmes, and more recently by institutional funding.
The Afreximbank facility is expected to bolster the company’s results as the reduction in funding costs will translate directly into improved profitability, while also improving tax efficiency.
African News Agency (ANA)