CDC Group plc, the British development finance institution, has concluded a US$25 million loan to Standard Bank Malawi, a subsidiary of South Africa’s and Africa’s largest banking unit by assets, Standard Bank, senior officials has announced.
The long-term, seven-year credit facility is intended to support Standard Bank’s efforts to increase lending to local businesses, particularly those with a need for foreign exchange, thereby supporting economic growth and job creation, according to a statement.
Malawi has periodically faced shortages of long-term foreign currency funding and CDC’s loan will help Standard Bank to provide long term funds.
“This credit facility will allow Standard Bank to provide much-needed foreign exchange,” said Jerome Burke, the CDC’s director of investment at a breakfast signing ceremony in the Malawian commercial capital, Lilongwe.
“By supporting Standard Bank, we are supporting those export-oriented businesses that are central to economic development and job growth in Malawi.”
Burke said the loan also fitted into CDC’s broader strategy to provide debt to businesses through local banks and financial institutions.
“We are delighted to be working with Standard Bank, who have a strong management team and are a key player in Malawi’s financial system,” he said.
For his part, Standard Bank Malawi’s new Head of Corporate and Investment Banking, Frank Chantaya, said through the US$25 million facility, the bank would provide lending to private businesses thereby helping to accelerate the country’s GDP growth.
“We see this facility supporting GDP growth in Malawi on a long-term and sustainable basis,” he said.
Chantaya said Standard Bank was proud of the partnership with CDC Group plc, one of the world’s oldest development finance institutions investing in Africa for over 65 years.
Founded in 1948, the CDC Group Plc invests in manufacturing, agribusiness, infrastructure, financial institutions, construction, health and education.