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USAID Information:
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U.S. Finance Guarantees South African Savings and Loan Participation
WASHINGTON, DC 20523
PRESS OFFICE
http://www.usaid.gov/
Press: (202) 712-4320
Public Information: (202) 712-4810
2004-022
FOR IMMEDIATE RELEASE
April 9, 2004
Contact: USAID Press Office
CAPE TOWN, SOUTH AFRICA - South Africans who have never been banking customers will now have the opportunity to benefit from expanded lending and savings products as a result of a deal signed today between Capitec Bank, Futuregrowth Asset Management, and the U.S. Agency for International Development (USAID).
USAID is providing a guarantee that allows Capitec to borrow up to approximately $8.3 million -the company's first loan from the private sector. Futuregrowth Asset Management, a specialist will make the loan supporting Capitec's aim of becoming the country's first full-fledged retail bank providing accessible and affordable banking services to the mass market, including the "under-banked" sector-those who have typically been ignored by the major lending institutions. Recent research reveals that up to 35 percent of households in South Africa have never had bank accounts. Furthermore, no similar private sector venture to service the "under-banked" has been tried in southern Africa, and international experience with this approach is extremely limited.
"We're extremely pleased by the confidence shown by Futuregrowth and USAID in Capitec Bank and look forward to expanding our network and products to better serve marginalised households and businesses," said Capitec's CEO, Michiel le Roux.
The five-year loan agreement was signed by Le Roux; Alberto Bottega, Deputy Chairman of Futuregrowth; and Frederick W. Schieck, USAID's Deputy Administrator, in a ceremony in Khayalitsha.
"USAID supports Capitec efforts to expand its services to families which have not yet participated with banking opportunities. This is an innovative program and a practical way of encouraging South Africans from lower and middle income households to benefit from savings and lending products," said Schieck at the signing.
Capitec banking operations began in 1999 and today Capitec has a network of 155 branches that is expected to increase to 200 by July 2004. The bank takes its facilities to where the market most needs them, with branches at train stations, taxi stands, townships, and rural, urban and peri-urban centres.
Futuregrowth has developed significant expertise in yield --- enhanced fixed interest portfolios. "This loan typifies Futuregrowth's funding of socially responsible investments on behalf of our clients. Backed by a proven Capitec lending process and the comfort of USAID guarantees, Futuregrowth clients can expect a good return on their investment," says Deputy Chairman of Futuregrowth, Alberto Bottega.
The U.S. Agency for International Development has provided economic and humanitarian assistance worldwide for more than 40 years.
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