The South African Bank Sasfin is the first to benefit from the COVID-19 emergency facility set in place by the EU and FMO’s NASIRA fund. The transaction concerns a 7-year USD 35 million facility. This will support Sasfin’s lending to COVID-19 affected borrowers in South Africa, and developing and originating new (digital) lending products, specifically targeting youth, female and migrant borrowers.
Sasfin, an innovative SME bank, and one of FMO’s longstanding and trusted partners in South Africa, has an entrepreneurial spirit and a genuine focus on financial inclusion. This makes the bank a most suitable candidate for the first-ever NASIRA signing under EU-funding.
South Africa remains a dual economy with one of the highest inequality rates in the world. Still it has a large and vibrant private sector, which is now struggling with the consequences of COVID-19. This is especially true for female, young and migrant entrepreneurs, who are often at a detrimental position when it comes to accessing financial services to develop their businesses. NASIRA seeks to address these inequalities by encouraging our partners to increase lending to these segments, contributing to inclusive development.
Linda Broekhuizen, CEO (a.i.) of FMO: ,,Support for SMEs is essential in lessening the impact of the COVID-19 pandemic on people’s livelihood and their communities. South Africa was already suffering from high unemployment and power cuts, and now the corona lockdown hit the economy even harder than many analysts were expecting. Sasfin is a longstanding partner who did not hesitate to embark with us on this new journey that the NASIRA fund offers. This first signing under EU funding is definitely a landmark from which hopefully a lot of South African entrepreneurs will benefit.’’
Michael Sassoon, CEO of Sasfin, adds: “We have always been committed to SMEs, 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. We are proud to be the first bank in the world to receive the NASIRA guarantee under EU funding which speaks volumes about the work we are doing for SMEs in our country. NASIRA ensures that we can continue to transform the business banking experience of our clients.”
In April NASIRA received EUR 25 million from the European Fund for Sustainable Development to support small COVID-19 affected entrepreneurs in Africa and EU Neighborhood. The Dutch government fund MASSIF also added EUR 7.5 million to NASIRA.
Marjeta Jager, Deputy Director-General in the Directorate-General for International Cooperation and Development at the European Commission, said: “Through our External Investment Plan, the EU is proud to provide the financial backing for the NASIRA guarantee. Today’s agreement between FMO and Sasfin means NASIRA will now be extended to small business owners across South Africa and help them adapt to the Covid-19 pandemic. It will target in particular female, young and migrant entrepreneurs. Our backing for NASIRA forms part of ‘Team Europe’, a joined-up response by the EU and its member states and financial institutions to the pandemic.”
FMO will support Sasfin by improving the reporting capabilities on the guaranteed portfolio and help in gaining risk management knowledge in collaboration with Hypoport’s investor reporting tool Prommise.
NASIRA is an innovative financial program that supports young, female, and migrant entrepreneurs in Sub-Saharan Africa and countries neighbouring Europe. As off April 2020 the scope is widened to also reach small COVID-19 affected entrepreneurs in the same regions.
NASIRA uses guarantees to allow local banks to on-lend to underserved entrepreneurs. The goal is to allow local banks to provide loans to groups they normally perceive as too risky. By so-called ‘risk-sharing’ NASIRA reduces the perceived and real risks of lending to vulnerable and underserved parts of the population.
The NASIRA guarantee is part of the EU External Investment Plan, which, by investing €4.6 billion in EU funds, is set to leverage an additional €47 billion in total investment from the public and private sector. It will enable small business owners to access affordable loans through local banks, microfinance institutions and other non-banking financial institutions. For more information, please visit www.nasira.info
Sasfin Holdings Limited is a banking and financial services group committed to enabling growth in the businesses and global wealth of its clients. Sasfin provide a comprehensive range of specialist financial products and services focused on the needs of asset suppliers, small and medium businesses as well as institutional and private investors. We go beyond a bank by working closely with entrepreneurs and investors to better understand their needs and provide appropriate solutions to the challenges they face.