FirstRand Bank Limited - Nasira Portfolio
Status: Approved investmentWhy disclosure?
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Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our customer
FirstRand Bank Limited (FRB or the bank) is a wholly owned subsidiary of FirstRand Limited (FirstRand or the group), which is listed on the Johannesburg Stock Exchange (JSE) and Namibian Stock Exchange (NSX). The bank provides a comprehensive range of retail, commercial, corporate and investment banking services in South Africa and offers niche products in certain inter-national markets. The bank has three major divisions which are separately branded: First National Bank (FNB), WesBank and Rand Merchant Bank (RMB).
What is our funding objective?
FMO will provide FRB with a USD50mln (in LCY equivalent) Nasira portfolio guarantee covering loans provided to Micro, Small, and Medium-sized Enterprises (MSMEs). The NASIRA guarantee aims to support FNB’s strategy to increase its lending to MSME entrepreneurs. The NASIRA guarantee will target a segment of customers in the South African financial industry, namely >50% Women/Youth/Rural and >65% Black Economic Empowerment as defined in the South African context.
Why do we fund this investment?
FRB has a longstanding relationship with FMO. FirstRand’s purpose is to build a future of shared prosperity, i.e. intentionally using its core business activities, including its role in allocating capital to the economy, to add value to society profitably and at scale. This aligns well with FMO’s goal of supporting impactful lending in the region, making FRB an ideal cooperation partner. This guarantee will enable FRB to lend to MSME clients that are typically outside of its risk appetite, thereby contributing to financial inclusion and job creation.
What is the Environmental and Social categorization rationale?
FRB is classified as an E&S A risk since the bank has a high exposure in absolute terms to high-risk sectors (outstanding exposure to high-risk long-term loans & project finance as well as to IFC Performance Standards (PS) Triggered Transactions). The high E&S risk portfolio can mainly be found in the RMB business line (25% of the group’s loan book) which represents the bank’s activities in the corporate and investment banking segments in South Africa and on the broader African continent. High E&S risk corporate client sector exposures include the chemical industry, up-stream oil and gas, mining, and agribusiness. FRB has a well-functioning Environmental and Social Management System (ESMS) which is broadly aligned with EDFI Harmonized E&S Requirements (including incorporation of applicable IFC PS) and operated by a team of E&S professionals. The bank has been a signatory to the Equator Principles since 2009 and to the UNEP FI Principles for Responsible Banking since 2020.
More investments
| Date | Total FMO financing |
|---|---|
| 7/2/2024 | ZAR 32.41 MLN |
- Website customer/investment
- https://www.firstrand.co.za/
- Region
- Africa
- Country
- South Africa
- Sector
- Financial Institutions
- Publication date
- 7/30/2024
- Effective date
- 7/2/2024
- Total FMO financing
- ZAR 847.29 MLN
- Funding
- FMO NV
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Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk
Environmental & Social Category
(A, B+, B or C) - A