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 | Standard Bank secures loan facility to boost black-empowered small businesses |  |  |
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20 October 2005
Standard Bank and Agence Francaise de Development (AFD), the French development agency, have signed a ?20 million (R160 million) loan agreement for financing new investments in the small and medium enterprise (SME) sector.
In 2003 Standard Bank signed the Financial Sector Charter committing it to, among other areas, help empower and develop SMEs run by those who have been denied access to financial services in the past.
Standard Bank has recognised the importance of delivery into the black economic empowerment market and has created a Business Development Unit to provide financing solutions to the SME market. The focus of the unit, which also houses the bank's Franchise Unit, is to provide black SMEs with contact- and leveraged financing.
As part of the loan agreement, Standard Bank has secured a R160 million loan from AFD to on lend to certain qualifying black SMEs, as defined in the Financial Sector Charter. Included in the loan is a grant element to be used to mentor SMEs who require mentorship and in this regard Standard Bank recently signed an agreement with business partners to provide this support.
The agreement includes an indemnity arrangement whereby risk on loans of between R1 million and R15 million will be shared between Standard Bank and AFD. This will allow for expanded financing opportunities in terms of the Financial Sector Charter.
Karl Kumbier, Standard Bank's Director of Business Development, says: "At Standard Bank we know that our country's success depends on the combined efforts of government, business - big and small - and foreign partners like AFD. This loan agreement is also our way of re-enforcing the commitment we made when we signed the Charter that we will, among other things, help emerging business gain access to financial services which will lead to job creation. It also supplements the bank's long-standing programme of social investment activities and projects aimed at assisting communities that have contributed to our growth and success."
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