DEG invests 50 million US dollars in South African SME bank
DEG's largest financing deal in Africa: DEG is providing the South African FirstRand bank with a long-term loan of 50 million US dollars.
South Africa is the third-largest economy of the African continent. In past years, however, the country's economic growth has slowed down considerably. The official unemployment rate is high at around 27 percent. In order to be able to develop and to contribute to job creation on the ground, local small and medium-sized enterprises (SMEs) in South Africa need reliable access to long-term loans.
This additional investment, the largest investment for DEG in Africa, will enable FirstRand expand the services it offers to SMEs. DEG arranged the long-term loan amounting to 100 million US dollars; 50 million US dollars on its own and 50 million US dollars from Proparco, the French DFI.
Long-term loan to support SME Business
FirstRand bank is one of the leading financial institutions in South Africa. It has three branded franchises: First National Bank for retail and commercial banking, Rand Merchant Bank for corporate and investment banking and Wesbank, specialised in vehicle finance.
Since 2002, DEG has provided six loans to its long-standing partner to support its SME business.
3,500 additional jobs
FirstRand bank is one of the country’s largest employers, with currently about 36,000 staff. A further increase in qualified, well-paid jobs is planned over the next five years. In addition, the bank generates considerable local income, including wages and taxes