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Proparco and Standard Bank strengthen their partnership for financing MSMEs

As part of Proparco’s Deputy CEO, Djalal Khimdjee’s visit to South Africa, Proparco and Standard Bank signed two new guarantees, strengthening their relationship in South Africa.

As part of Proparco’s Deputy CEO, Djalal Khimdjee’s visit to South Africa, Proparco and Standard Bank signed two new guarantees, strengthening their relationship in South Africa.

Published Dec 21, 2021

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Proparco and Standard Bank signed two guarantee agreements for €28.5 million in Johannesburg today during Proparco’s Deputy CEO, Djalal Khimdjee’s visit to South Africa.

The guarantees are in line with the Choose Africa initiative to accelerate the growth of Micro, Small and Medium Enterprises (MSMEs) and entrepreneurship in Africa. Standard Bank will further support job creation for MSMEs in South Africa through these guarantees. The EURIZ guarantee grant has benefited from support from the European Union and the Organization of African, Caribbean and Pacific States.

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As part of Proparco’s Deputy CEO, Djalal Khimdjee’s visit to South Africa, Proparco and Standard Bank signed two new guarantees, strengthening their relationship in South Africa:

  • An ARIZ ZAR-denominated loan portfolio guarantee (€19.5 million), allowing the bank to sustain its SME lending activities in a challenging post-Covid environment in South Africa.
  • A EURIZ ZAR-denominated loan portfolio guarantee (€9 million) which will focus on the EURIZ eligible sectors- fintech, agriculture, green economy, education and healthcare sectors, as well as women- and youth- owned enterprises, allowing the bank to expand its SME lending activities into high impact sectors.

The two guarantees, which amount to a total of €28.5 million (R332 million), will help finance hundreds of MSMEs and contribute to Choose Africa, the French initiative dedicated specifically to African entrepreneurs, start-ups and MSMEs.

Standard Bank looks to achieve its purpose, and drive Africa’s growth, while making a substantial impact on society; these elements being embedded in their Social, Economic and Environmental (SEE) framework.

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Standard Bank’s thinking has been informed by the priority issues and targets contained in the United National Sustainable Development Goals, the African Union's Agenda 2063, as well as the various national development plans and policies of the countries in Africa in which it operates. This relationship with Proparco embodies this and allows one more way for how Standard Bank delivers on its SEE purpose, targeting developmental sectors, including financial inclusion, health, education, and the green economy.

In 2020, the COVID-19 pandemic negatively affected the South African economy. In this context, the financial support to MSMEs is a key priority. In the wake of the economic crisis, Standard Bank has committed to supporting its existing MSME clients, as well as the South African MSME sector. Standard Bank was one of the first banks to proactively offer client relief initiatives (payment holidays, instalment reductions, short-term financing) during Covid, and additional salary support to staff of over 3500 small & medium sized businesses through partnering with the South African Future Trust (SAFT).

Standard Bank South Africa is an existing partner of Proparco, having benefited from Proparco’s Unlock Guarantee in 2018, in the context of Standard Bank’s R618 million (USD 44m) senior debt facility to Alten Solar Power (Hardap) Pty Ltd.

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Proparco and Standard Bank see significant potential to replicate this transaction in the context of the Group’s multiple African subsidiaries.

“We are very glad to expand our partnership with Standard Bank through this transaction fully dedicated to SMEs who play a critical role in the economic recovery of the region. Furthermore and thanks to the involvement of the European Commission, we will be able to accompany Standard Bank in its willingness to provide additional financial solutions to specific sectors and profiles of SME (start-ups, youth and women led businesses). This is 100% in line with the objectives of the Choose Africa initiative launched by the French Government”.

“Standard Bank is committed to being more than a provider of financial products and services – we are a catalyst for economic change in our countries of operation. Our vision is to drive Africa’s growth and our Social Economic and Environmental (SEE) strategy aims to embed Social, Economic and Environmental considerations into our lending decisions and business practices in a way that helps us to continue supporting our clients, whilst producing value for society at large. We are excited about signing two new guarantee agreements with Proparco as it provides us the capacity to expand access to finance to South African MSMEs operating in sectors that hold the potential to address the socio-economic impact of COVID-19 and grow the South African economy. This development illustrates our Group’s steadfast commitment to our SEE strategy and ongoing support of South African small enterprises as well as economic growth,” says Lungisa Fuzile, Chief Executive of Standard Bank South Africa.

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These initiatives will contribute to several Sustainable Development Goals, including #3 (Good Health and Well Being), #5 (Gender Equality) and #8 (Decent Work and Economic Growth).

About Proparco:

Proparco is the private sector financing arm of Agence française de développement Group (AFD Group). It has been promoting sustainable economic, social, and environmental development for over 40 years. Proparco provides funding and support to both businesses and financial institutions in Africa, Asia, Latin America and the Middle East. Its action focuses on the key development sectors: infrastructure, mainly for renewable energies, agribusiness, financial institutions, health, and education.

Its operations aim to strengthen the contribution of private players to the achievement of the Sustainable Development Goals (SDGs) adopted by the international community in 2015. To this end, Proparco finances companies whose activity contributes to creating jobs and decent incomes, providing essential goods and services, and combating climate change. For a World in Common.

For further information: www.proparco.fr and @Proparco

About Standard Bank Group:

Standard Bank Group is the largest African bank by assets, operating in 20 African countries. Headquartered in Johannesburg, South Africa, Standard Bank is listed on the Johannesburg Stock Exchange, with share code SBK, and the Namibian Stock Exchange, share code SNB.

Standard Bank has a 159-year history in South Africa and started building a franchise outside Southern Africa in the early 1990s.

The Standard Bank strategic position enables the bank to connect Africa to other select emerging markets as well as pools of capital in developed markets, and its balanced portfolio of businesses, provide significant opportunities for growth.

The group has over 50 000 employees, more than 1100 branches and over 6500 ATMs on the African continent, which enable it to deliver a complete range of services across Consumer and High Net Worth Clients, Corporate and Investment Banking Clients and Business and Commercial Clients.

Headline earnings for 2020 were R15.9 billion and total assets were R2.5 trillion (about USD170 billion). Standard Bank’s market capitalisation as of 31 December 2020 was R209.4 billion (USD14 billion).

The group’s largest shareholder is the Industrial and Commercial Bank of China (ICBC), the world’s largest bank, with a 20.1% shareholding. In addition, Standard Bank Group and ICBC share a strategic partnership that facilitates trade and deal flow between Africa, China and select emerging markets.

For further information, go to www.standardbank.com

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