Absa will see its lending capacity increase following a $497m guarantee singed between the South African-based banking group and Multilateral Investment Guarantee Agency.
The guarantee, which was implemented by Absa Group in December last year, will help the bank expand financing across seven countries in Sub-Saharan Africa.
“This creates an opportunity to grow lending, with focus on increasing sustainable financing for corporates and small and medium-sized businesses, as well as projects with climate benefits,” Absa said in an emailed statement at the weekend.
Absa said Multilateral Investment Guarantee Agency, a member of the World Bank Group, will issue guarantees of $497m for as long as 15 years in Absa’s subsidiaries in Uganda, Ghana, Kenya, Mauritius, Mozambique, Seychelles and Zambia.
The guarantees will help to protect Absa against risks related to mandatory capital reserves, free up financial capacity, enable Absa’s subsidiaries to provide additional lending and generate more revenue.
“The guarantee allow us to provide additional financing in our subsidiaries in Uganda, Ghana, Kenya, Mauritius, Mozambique, Seychelles and Zambia,” Mr Jason Quinn, the Absa Group financial director, said in a statement.
The Multilateral Investment Guarantee Agency was created in 1988 as a member of the World Bank Group to promote foreign direct investment in emerging economies to support economic growth, reduce poverty and improve people’s livelihood.