Absa will get a R2 billion loan from the International Finance Corporation, part of the World Bank, to help South Africa’s third-largest bank by assets expand its affordable mortgage business.
IFC’s first social sector loan in South Africa is targeted at low-to-middle income households, Adamou Labara, the lender’s country manager, said in a statement.
South Africa, where the official unemployment rate remains the highest among 82 countries tracked by Bloomberg, has a housing deficit of 3.7 million, the statement said. The shortage is most acute in the lower segment of the market, which faces a lack of access to finance.
The loan complies with the Social Loan Principles published by the Loan Market Association, which aims to establish best market practice for syndicated loans in Europe, the Middle East and Africa. Such a loan funds projects that address key social issues, including lack of access to affordable basic infrastructure such as energy, clean water and housing.
Absa in March announced plans to fund R100 billion of new environmental, social and governance-related products by 2025, doubling its R47 billion portfolio.
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