$400m boost for African small business

first_img20 May 2010South Africa’s Standard Bank group and the Netherlands Development Finance Company (FMO) have signed a US$400-million (about R3.1-billion) risk-sharing facility for financing small businesses in Africa and other emerging markets.Businesses using the facility can secure loans of between $7.5-million and $40-million, which can be accessed in US dollars, euros or local currency, with the tenor ranging between four and 10 years.“The signing of this risk sharing facility with Standard Bank group marks the start of an intensified cooperation which we expect will provide numerous African SMEs with access to finance,” FMO chief investment officer Jurgen Rigterink said in a statement this week.He pointed out that Standard Bank had an extensive network and origination capacity in several African countries, while FMO could bring additional financing with longer tenors that were currently not available in the commercial banking market.Risk capitalFMO, the international development bank of the Netherlands, invests risk capital in companies and financial institutions in developing countries. As a result of its relationship with the Dutch government, it is able to take financial risks that commercial financiers are not prepared to take.“The bank is delighted to have signed this risk share agreement with FMO as it will provide additional capacity for supporting SMEs and corporate growth stories in both Africa and other developing markets,” said Standard Bank head of international development Dipak Patel.“In particular, the agreement will provide flexibility in both tenors and currency to match client development plans and business capabilities.”SAinfo reporterWould you like to use this article in your publication or on your website? See: Using SAinfo materiallast_img