The International Finance Corporation (IFC) has signed a US$75mn multi-country loan facility with Standard Bank Group. The facility will provide long-term subordinated loans qualifying as Tier II capital to Standard Bank banking subsidiaries in Democratic Republic of Congo, Ghana, Kenya, Malawi, Mauritius, Mozambique, Tanzania, Uganda and Zambia.
The loans, which are subject to requisite prior regulatory approvals for Tier II compliance, will enable Standard Bank to strengthen its capital base and expand operations across Sub-Saharan Africa.
“IFC’s multi-country loan facility to Standard Bank Group offers a unique opportunity to foster a strong partnership between one of the largest African banking groups and IFC,” says IFC executive vice-president Lars Thunell, who signed the multi-country facility on behalf of IFC. “By providing the loans to the local SBG subsidiaries, IFC will help expand the group’s operations in the region. We also recognise the global potential for this partnership with Standard Bank Group, as they continue to expand in emerging markets beyond Africa.”
The multi-country facility is expected to expand credit availability to the private sector, promote tier II capital as an effective instrument in strengthening bank capital, support the transfer of product knowledge and expertise across the Standard Bank Group’s African network, and increase competition in the banking sectors in several countries.
It is believed, claims Standard, that a strong financial system plays a particularly important role in the creation of a well-functioning private sector; bringing about competition, domestic and international market integration, economic growth, and ultimately, poverty reduction.