Finance: Standard Bank Partners with Fabcos to Fund SMEs
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Standard Bank and Fabcos (Foundation for African Business and Consumer Services) have entered into a partnership agreement which could see SMEs (small medium enterprises) accessing an estimated R400 million in loan funding.
The partnership is aimed exclusively at Fabcos members, the majority of whom are SMEs. Fabcos was formed in 1988 to promote and develop black business and assist with economic empowerment.
“SMEs form the backbone of our economy and we are delighted to partner with a well respected and credible organisation like Fabcos. We have no doubt that this partnership will help contribute to the growth and development of South Africa. It is a huge opportunity to support black SMEs in keeping with our Financial Sector Charter commitment,” says Sean Robertson, Director Lending Products at Standard Bank.
Fabcos President Mxolisi Zwane said: “We are delighted with this arrangement; access to capital is one of the major hurdles preventing those at the bottom of the Wealth Pyramid from joining the mainstream economy, and we hope that this type of arrangement will become a common feature of the SA Economy.”
In terms of the deal, Fabcos members applying for a loan must first meet Standard Bank’s lending criteria. Loans will typically be in the region of R300 000 each and will generally be used as working capital and for business expansion. Standard Bank and Fabcos will share risk. However, risk is reduced by the fact that the majority of Fabcos’ members are well established and sustainable businesses.
Each deal will be assessed individually and Fabcos will provide members with a letter of introduction for Standard Bank. All deals will be processed though the bank’s specialised lending credit area.
Fabcos members span a broad range of industries, including accounting, medical, legal, liquor, building and construction, farming, travel, and textile.
Business News Sector Tags: Finance|