Strengthening the banking sector and helping it reach businesses and individuals previously unable to access banking services are two of the main goals of IFC’s work in financial markets across Sub-Saharan Africa.
IFC’s recent investment of one billion South African rand (about $140 million) in South Africa’s Nedbank illustrates how IFC is helping broaden the reach of African banks. Nedbank will use the funds to increase lending to underserved markets in Africa for affordable housing development, black economic empowerment transactions, smaller businesses, large-scale infrastructure and resource-extraction projects, and the agribusiness sector. Nedbank will also contribute to improving the quality of financial intermediation in the region by helping to strengthen the corporate governance standards of its regional subsidiaries, business partners, and clients.
The Nedbank partnership was not the first time IFC invested in a South African bank to help it expand in Africa, develop the region’s financial markets, and reach underserved segments of the population. Just last year, IFC invested $75 million in Standard Bank so it could provide long-term subordinated loans to its subsidiaries in Democratic Republic of Congo, Ghana, Kenya, Malawi, Mauritius, Mozambique, Tanzania, Uganda and Zambia. The loans will enable Standard Bank to strengthen its capital base and expand operations across Sub-Saharan Africa.
"IFC’s work in Sub-Saharan Africa’s financial markets focuses on improving access to finance and helping building stronger financial markets," said Anne Hawkins, Principal Investment Officer in IFC’s Global Financial Markets department. "Efforts are also aimed at encouraging investment from one developing nation into another and increasing funding for sustainable development projects. Working with banks such as Standard Bank and Nedbank helps IFC achieve these strategic priorities," she added.
Nedbank is already a leader in the region when it comes to sustainable banking. The bank’s commitment was recognized at the 2007 Sustainable Banking Awards in June, when it was awarded the Emerging Markets Sustainable Bank of the Year in the Middle East and Africa award. The awards program was created by the Financial Times in association with IFC to recognize banks that have shown leadership and innovation in integrating social, environmental, and corporate governance objectives into their operations.
It is also the only bank in Africa that has adopted the Equator Principles, a voluntary set of guidelines for managing social and environmental issues in project-finance lending, based on IFC’s performance standards.
The investment in Nedbank is IFC’s largest to date in Sub-Saharan Africa’s financial markets. The African Development Bank also invested an equal amount of funds in Nedbank alongside IFC, helping create a platform for greater coordination between the two institutions.
For more information contact:
Houtan Bassiri
Communications Officer
Johannesburg, South Africa
Tel: +27 11 731 3179
Email: hbassiri@ifc.org
