CAPE TOWN - FNB WILL receive new financing of $100 million (R1.2 billion) from the International Finance Corporation (IFC), to support its lending to small and medium enterprises (SMEs), with a focus on women-owned businesses.
The financing – announced yesterday by the IFC, a member of the World Bank Group – falls under the IFC SME Push Programme, a comprehensive, multi-stakeholder initiative that intends to promote lending and strengthen support for small and medium enterprises by the formal banking sector.
FNB has a pioneering role as the first institution to be financed under the SME Push. The collaboration includes advisory services to FNB and its SME clients to increase their financial literacy.
Mike Vacy-Lyle, the chief executive of FNB Business said: “FNB is committed to actively supporting and growing SMEs as an engine of job creation, economic growth and innovation. As the SME bank of choice, our value proposition is based on understanding the challenges that small businesses navigate and offering solutions that remove this everyday angst.
“At FNB we also appreciate the important role that women-owned businesses play in our economy. We feel that women-run businesses require much more airtime and we hope to grow this segment of the market.”
The IFC SME Push Programme was launched in June last year(2017) to channel up to $3bn into South African SMEs over the next five to seven years through a comprehensive package, including investments, risk-sharing facilities and advisory services.
“The second financing includes a syndicated loan and incentives to reach more women-owned enterprises within the general SME segments, in alignment with World Bank Group and the government of South Africa objectives to reach deeper into the economy,” the IFC said in its statement.
The programme was developed to complement government policies promoting lending to small and medium enterprises and to spur job creation in South Africa.
Aliou Maiga, IFC regional head for the Financial Institutions Group in Africa said: “IFC applauds and supports FNB’s continued expansion of services to SMEs, with a new focus on women. We look forward to an even stronger partnership to increase our impact South Africans that have been historically disadvantaged and that can make a major contribution to the local economy.”
IFC is working to foster competitiveness and inclusive business approaches in South Africa, supporting efforts by the government of South Africa to reduce inequality, promote investments and strengthen institutions.
In South Africa, SMEs account for about 40 percent of gross domestic product and, according to the Finscope (2006) survey, 90 percent of jobs created between 1998 and 2005 were in small, medium and micro enterprises.
Based on this, the SA Institute of Chartered Accountants suggests that according to the National Development Plan, SMEs are expected to provide 90 percent of new jobs by 2030.
- BUSINESS REPORT