The World Bank Group’s International Finance Corporation (IFC) recently agreed to loan Absa Group Limited up to ZAR 2 billion (USD 124 million) to increase access to housing loans for “thousands” of low- and middle-income families in South Africa. In addition to its home country of South Africa, Absa offers banking, insurance and investment management services in Botswana, Ghana, Kenya, Mauritius, Mozambique, Seychelles, Tanzania, Uganda and Zambia.
Adamou Labara, IFC’s country manager for South Africa, stated, “Access to affordable housing is key for achieving inclusive and sustainable economic growth in South Africa.”
This is the first loan issued in South Africa that is recognized by the UK-based Loan Market Association as complying with its Social Loan Principles, meaning the wholesale loan “finances projects that address social issues or achieve positive social outcomes.”
Punki Modise, Absa’s chief strategy and sustainability officer, stated, “We further elevated the importance of environment, social and governance during a review of Absa’s strategy last year. Within this, inclusive finance is a significant impact area, including affordable housing mortgages, as well as financing SMEs [small and medium-sized enterprises], women-owned businesses and youth.”
Founded in 1991, Absa holds assets valued at MUR 164 billion (USD 3.8 billion) as of 2021.
Founded in 1956, IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in low- and middle-income countries. During the 12 months ending June 2021, the organisation disbursed investments totaling USD 31.5 billion, of which about one third was mobilised from partner institutions.
By Sheen Gupta, Research Associate
Sources and Additional Resources
IFC press release
https://pressroom.ifc.org/all/pages/PressDetail.aspx?ID=27119
Absa homepage
https://www.absa.africa
Loan Market Association homepage
https://www.lma.eu.com
Previous MicroCapital article on Absa
/microcapital-brief-usplus-borrows-11m-from-lendable-absa-to-boost-access-to-factoring-for-smes-including-black-owned-rural-companies/
Previous MicroCapital article on IFC
/microcapital-brief-ifc-loans-105m-to-crdb-bank-to-increase-funding-for-msmes-especially-women-owned-enterprises-in-tanzania-burundi/
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