SOUTH AFRICA – Investment bank JPMorgan Chase & Co says it has launched a US$20.2 million (R300 million) fund for black-owned enterprises in South Africa, a sign that global investment banks are still betting on the country despite its anaemic economic growth in recent years, according to Money Web.
After more than two years of engagement with the Department of Trade, Industry & Competition, JP Morgan has become the first global investment bank in South Africa to launch an equity equivalent investment program (EEIP).
The fund was launched in partnership with South Africa’s Department of Trade, Industry and Competition (DTIC), the bank said.
Although the covid-19 pandemic has shrunk the economy of Africa’s most industrialized nation to its level of a decade ago, local banks, retailers and realty firms see a brighter future because of the country’s young population, rising entrepreneurship and strong middle class.
“The South African private sector has great capacity to multiply impact through partnerships, as we are aiming to do with the DTIC,” Kevin Latter, JPMorgan’s senior country officer in South Africa, said during a virtual conference.
The R300 million (US420.2 million) fund, which is accompanied by a grant of R40 million (US$2.7 million), will be disbursed as short-term loans with a duration of about three to four months and long-term loans with a duration of two to five years, Latter said.
He did not say at what interest rate the bank would offer the loans but said they would be “heavily subsidized and below commercial rate”.
The fund could potentially unlock R2 billion (US$134.7 million) in capital over an eight-year period and would create hundreds of jobs, said Ebrahim Patel, the country’s minister of trade and industry.
“The South African private sector has a great capacity to multiply impact through partnerships, as we are aiming to do with the DTIC”Kevin Latter – Senior Country Director for South Africa, JPMorgan
A few days ago, in light of the recent civil unrest and COVID-19 third wave in South Africa, the bank announced tha it is making a contribution of ZAR 4,500,000 (US$303,000) in support of food security, with the goal of supporting the most vulnerable and impacted communities.
This contribution is intended to support the most vulnerable and impacted communities of South Africa as part of the collective efforts towards the country’s recovery.
At a time when many people are unable to access food and other basic goods, JPMorgan Chase is donating ZAR 2,300,000 (US$155,000) to Gift of Givers in support of packing and distributing food parcels to reach the most vulnerable individuals and families in KwaZulu-Natal communities that were hard hit by the food shortage crisis.
In addition, the bank also committed ZAR 2,200,000 (US$148,000) to Yebo Fresh, which will help increase access to food supplies for people in Gauteng townships amid the food shortage crisis.
At a time when many citizens are unable to access food and other basic goods, Yebo Fresh will provide between 550,000-600,000 meals to those who need it most.
Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy and more. SUBSCRIBE HERE