JBIC LOAN TO SUPPORT SMEs IN SOUTH AFRICA Two-Step Untied Loan Agreement signed with IDC
1. Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Yasuda) signed today a loan agreement totaling $100 million, yen equivalent, with the Industrial Development Corporation of South Africa Limited (IDC) in Johannesburg to bolster small- and medium-sized enterprises (SMEs). This loan is cofinanced with Sumitomo Bank (lead bank), the Industrial Bank of Japan and Standard Chartered Bank, Tokyo Branch, with JBIC covering a 50% share of the total, or $50 million yen equivalent up to the maximum of 6.6 billion yen).
2. The loan will support and foster SMEs with the view that they serve to develop the supporting industry, promote exports, substitute for imports and create employment in South Africa. The loan will provide lending funds through IDC, a governmental financial institution of South Africa, to SMEs for capital investment and long-term operational needs. Developing the supporting industry and job creation are important policy tasks for the country that is seeking to attract foreign capital and reduce interracial income disparities. This loan is expected to help address these needs by fostering SMEs.
3. South Africa is endowed with abundant natural resources, including rare metals, and has strong relations with Japan that imports its natural resources. Moreover, since the nations located in southern Africa, with which South Africa is strengthening political and economic ties, and those in eastern Africa have good prospects as markets, this loan is expected to assist efforts to cultivate prospective export markets and sources of imports. At the same time, the loan will help develop the supporting industry, which, in turn, will improve the country's investment climate, thereby expanding business opportunities for Japanese firms in the mid- and long-term.