business banking, debtor finance, financing entrepreneurship, enhancing cash flow, plant and machinery finance, mergers and acquisitions, company buy-out, company buy-in, investment banking, development capital, Altx listings, money markets, office equipment rentals, international trade, finance solutions, BEE funding, call deposits, notice deposits, fixed deposits, negotiable certificates of deposit, creating wealth, preserving wealth, investment and asset consulting, regulation 28 compliance, Altx listing; basic finance, cash flow finance, finance debtor, credit finance, equity finance, finance banking, financing debtors, loan finance, working capital finance, money finance, turnover finance, equity loans, finance loans, loan companies, loan deals, loan rates, small business loans, small business loan, non debt funding, debt finance, debt funding, equity funding, funding for shares, investment funding, jse listing, jse listings, jse sponsor, designated advisor, capital raising, investment banking

Sasfin gets IFC backing

THE International Finance Corporation (IFC), the private sector arm of the World Bank Group , has taken a 12% equity stake in the Sasfin Group, valued at $10m, and will inject a further $20m into the group.

At least $10m of the $20m will be in the form of a trade finance guarantee facility and the balance will be a second-tier loan to the group’s subsidiary, Sasfin Bank. The transaction in effect makes more loan finance available to the small- and medium-size business segment at a time when commercial banks’ appetite to lend money, particularly to small businesses, has waned.

The deal will swell Sasfin’s loan book of R2bn, which it can gear up 10 times, making more finance available to entrepreneurs at a critical time .

Announcing the transaction yesterday, Sasfin CE Roland Sassoon said the association with the influential IFC was important and gave Sasfin the platform to extend its offering. “We target the entrepreneurial market and since the credit crunch this market has been struggling. To have a partnership like this is a huge recognition for Sasfin. We are a small bank, but this will help us go that much further,” Sassoon said.

As a development finance institution, the IFC partners with financial institutions in developing markets to boost private sector mettle .

While the deal will strengthen Sasfin’s capital base, having an influential shareholder such as the IFC should also boost Sasfin’s business . Executive director Malcolm Segal put the deal on par with Sasfin’s listing in 1987 and it acquiring a banking licence.

The deal has been in the making for a year.

“What attracted the IFC was the role Sasfin plays in the local economy,” said James Scriven, the IFC’s director, global financial markets for the subSaharan Africa and Pacific regions.

“Access to credit in the SME (small to medium enterprise) sector is very scarce. The market (Sasfin) operates in was a key driver to motivate the IFC’s investment.”

The equity part of the deal will see Sasfin issue shares to the IFC, which on a pro forma basis will boost headline earnings 5% to R68,7m, while net asset value per ordinary share will be a marginal 1% higher at R23,04.

Shares in Sasfin yesterday traded unchanged at R26,15.