30460 - Project Leo

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Summary of Investment Information

Project Number

30460

Company Name

RESIDUAL DEBT SERVICES LIMITED

Date SPI Disclosed

Nov 1, 2013

Country

South Africa

Region

Africa

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Jun 3, 2021

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Oct 11, 2013
Signed : Nov 1, 2013
Invested : Nov 22, 2013

Sector

Commercial Banking - Consumer Finance

Project Description

This Summary of Investment Information relates to a potential equity investment in African Bank Investment Limited (ABIL, the Company). The investment is intended to strengthen the Company’s capital base in order to grow its lending operations. African Bank Limited (ABL), a wholly own subsidiary of ABIL, is an existing client of IFC.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	100.0
Equity	100.0

Development Impact

(i) Financial inclusion: the project will help broaden access to credit for low income populations that could not have formal access to credit otherwise. Bringing these under-served populations into the formal banking system has the following benefits: i) better cost of credit compared to informal money lenders; ii) customer protection through the regulatory framework, and iii) a credit history useful for future credit requests.

(ii) Housing Improvement and Education: about 50% of the loans granted by ABIL are used for home improvement and education. In a post-apartheid context, improved housing and education are critical for South Africa, as they contribute to the integration and empowerment of previously disadvantaged populations.

(i) Stamp of Approval: At a time when the international community of investors show decreased confidence in the South African economy, and even less in the unsecured lending industry, IFC would endorse a player with proven record in the industry. In the current context, such support will be very valuable for ABIL.

(ii) Long-term Risk Capital: the IFC sub-underwriting commitment of approximately up to US$60 million will contribute to the successful completion of the Company''s rights issue. The rights issue will reinforce the capital base of the Company and is critical for its operations.

E&S Category Rationale / Risks and Mitigation

Contacts

For Inquiries About the Project, Contact

Nithia Nalliah, Group Chief Finance Officer
African Bank Investment Limited
59 16th Road, Midrand, 1686
South Africa

Telephone: +27 11 256 9255
Fax: +27 87 944 9572
E-mail: mailto:NNalliah@AfricanBank.co.za
Website: http://www.abil.co.za

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This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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