The Netherlands Development Finance Company, a public-private partnership also known by its Dutch acronym FMO, recently selected Sasfin Bank of South Africa to be the first beneficiary of an emergency risk-sharing facility intended to counter the impacts of the COVID-19 pandemic. The facility is part of FMO’s Nasira fund, which guarantees bank loans to “young, female, and migrant entrepreneurs in Sub-Saharan Africa and countries neighbouring Europe.” Specifically, the program reimburses lenders to the extent that they lose more than 10 percent on their loans to members of the target groups. The agreement with Sasfin Bank has a term of seven years and covers up to USD 35 million in loans.
“We have always been committed to SMEs [small and medium-sized enterprises] and, with Nasira, are now in an even better position to step up support to so many SMEs who struggle to access finance. This facility is a major next step in expanding our digital B\\YOND Business Banking offering, becoming more diverse and inclusive as we launch to market in 2021,” said Michael Sasson, CEO of Sasfin Bank.
Separate from Nasira, FMO is also lending Sasfin Bank ZAR 390 million (USD 25 million) for a term of two years.
Founded in 1951, Sasfin Bank is a member of Sasfin Holdings Limited, which is based in the city of Johannesburg and comprises Sasfin Bank, Sasfin Wealth and Sasfin Capital. As of June 2019, Sasfin Holdings Limited reported total assets of ZAR 14.6 billion (USD 941 million).
Nasira was established in 2018 under a four-year agreement between FMO and the EU’s European Commission in the amount of EUR 75 million (USD 88 million). Nasira’s emergency COVID-19 facility has been capitalized by the EU’s European Fund for Sustainable Development and MASSIF, a fund that FMO manages for the Dutch government.
Established in 1970, FMO is 51-percent held by the Dutch government and 49-percent by the private sector. The institution works toward the UN’s Sustainable Development Goals by funding capacity development as well as placing debt and equity investments in sectors such as agribusiness, financial institutions and energy. During the six months ending June 2020, FMO lost EUR 280 million (USD 330 million) on a total portfolio of EUR 12.7 billion (USD 14.9 billion).
By Kate Finster, Research Associate
Sources and Additional Resources
Direct contact with FMO
FMO press release
https://www.fmo.nl/news-detail/fbebd15d-1e38-4d3b-8802-8b13db7d8faa/south-african-bank-sasfin-first-to-benefit-from-eu-fmo-emergency-facility
Sasfin Bank homepage
https://sasfin.com/
Sasfin Holdings Limited 2020 annual report
https://sasfin.com/media/4104/sasfin-holdings-limited-integrated-report-2020.pdf
Nasira homepage
http://www.nasira.info
Previous MicroCapital article on FMO
https://www.microcapital.org/microcapital-brief-fmo-loans-5m-to-husk-power-systems-for-renewable-energy-generated-from-biofuels-distributed-via-minigrids-in-rural-india-tanzania/
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