HOUSING: Capitec Bank Raises R100m In Funding
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South Africans in search of a real alternative to traditional banking will benefit from the innovative and affordable finance options offered by Capitec Bank, following the conclusion of a R100 million funding agreement between the bank and the Norwegian Investment Fund for Developing Countries (NORFUND).
Riaan Stassen, Chief Executive Officer, and André du Plessis, Financial Director, both of Stellenbosch-based Capitec Bank, as well as Deepak Malik, Head of the Norfund Southern African office, and Fred Pelser, Associate of the Southern African office, signed the five-year loan agreement on Friday, 20 March 2009 at Capitec Bank’s head office in Stellenbosch. Exchange Control Approval by the South African Reserve Bank was granted on 30 April 2009.
This facility was approved after a full on-site credit review performed by Norfund in September 2008. The review included a detailed assessment of Capitec Bank’s corporate governance, compliance, FICA and KYC procedures, as well as an evaluation of Capitec Bank’s social responsibility measures. Additionally, a review of Capitec Bank’s strategy, financial results, loan portfolio structure and credit approval processes, as well as a detailed examination of the bad debt and provisioning methods employed by Capitec Bank, was undertaken. Capitec Bank appreciates the level of Norfund’s commitment to the bank and plans to utilise these funds to grow its long-term loan portfolio.
Commenting on the agreement, André du Plessis said, “Having another significant international provider of funding further diversifies our own funding base. Norfund, another development finance institution that provides funding to Capitec Bank, is increasing its investment in the financial sector in Southern Africa and we welcome their involvement in our business.”
Head of the Norfund Southern African office, Deepak Malik, commented by saying, “The overall objective of this funding agreement is to allow Capitec Bank to continue the expansion of the maturity and diversification of its product offering and consequently to lower the cost of credit for the South African emerging population. Norfund looks forward to a long and successful relationship with Capitec Bank, a recognised and responsible financial services provider in South Africa.”
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