A new umbrella microfinance institution (MFI) SA Financial Enterprise Agency (Safea) has reportedly been established under the Industrial Development Corporation (IDC), a development finance institution backed by the government of South Africa. The MFI will be created through the fusion of three government entities: the SA Microfinance Apex Fund, a trading entity and funding institution; Khula Enterprise Finance (KEF), an institution that provides funding to financial institutions; and the IDC’s small-business lending program. The MFI aims to encourage start-up enterprises and will use Postbank facilities, which are saving institutions that provide banking facilities at post offices, to distribute loans to small businesses.
According to Economic Development Minister Mr Ebrahim Patel, the integration of the companies will lead to approximately ZAR 20 million (USD 2.6 million) per year in administrative savings, which will be reinvested to support finance products for small businesses.
The amount to be loaned has not been released but is expected to be approximately ZAR 3 billion (USD 384 million).
By Charlotte Newman, Research Associate
Sources and Additional Resources:
Business Report: “Microfinance Bodies Merge Into Single Fund,” http://www.iol.co.za/business/business-news/microfinance-bodies-merge-into-single-fund-1.1282238
MicroCapital.org story, March 12, 2012, “MICROFINANCE EVENT: Everest Leadership Training ‘2012 Africa Microfinance Conference On Back to Basics,’ April 18 – 20, 2012, Johannesburg, South Africa,” https://www.microcapital.org/microfinance-event-everest-leadership-training-2012-africa-microfinance-conference-on-back-to-basics-april-18-20-2012-johannesburg-south-africa/
MicroCapital.org story, December 20, 2011, “MICROCAPITAL BRIEF: FinMark Trust’s Annual FinScope South Africa Survey: Financial Inclusion Down from 77% to 73%,” https://www.microcapital.org/microcapital-brief-finmark-trusts-annual-finscope-south-africa-survey-financial-inclusion-down-from-77-to-73/
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