First National Bank (FNB) has announced that 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.
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 five to seven 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.
According to The National Development Plan 2030, South Africa needs to have approximately 8 million active SME’s in order to achieve set targets of creating 11 million jobs by 2030. The decision by FNB comes off the back of this need in an attempt to improve small business conditions in the country.