The International Finance Corporation (IFC), a member of the World Bank Group, has announced that it will extend a seven-year R740 million term loan to Mercantile Bank Limited, allowing the bank to grow its lending to South African Small and Medium Enterprises (SMEs) and with a focus on women-owned SMEs.
“A lack of access to finance is one of the biggest barriers to their success and ability to grow to create employment and wealth,” said Karl Kumbier, CEO of Mercantile. He said the bank’s sole purpose is to grow entrepreneurs and it is expanding this purpose to focus on supporting female entrepreneurs.
Kumbier said early-stage entrepreneurs and other women involved in SMEs and business are steadily working to increase the level of female participation in the economy, but much more remains to be done to realise a more equitable economic future for the working female population of South Africa.
He added that while start-ups and micro enterprises make a vital contribution to addressing unemployment in South Africa, it is critically important to ensure the growth of established small and medium-sized businesses.
“Established small businesses generate much-needed jobs and help to improve the lives of far more people than just the business owner.”
Mercantile said it has doubled its lending to SMEs over the past five years and this loan will position the bank to sustain its growth momentum.
Mercantile and the IFC have previously concluded a securitisation deal in 2014. The transaction valued at R240 million, saw the securitisation of Mercantile Rental Finance contracts and was the first of its kind in sub-Saharan Africa.