First National Bank (FNB) says its parent company, FirstRand, and the International Finance Corporation (IFC) have concluded a loan agreement in the amount of $200 million (R2.6 billion).
The loan is aimed at magnifying lending and support for the SME sector in South Africa, where FNB is a leading player.
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,” said 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.
The SME Push Program is designed to align with government policies in order to assist in gearing South Africa towards these set goals.