| Mon 1 Dec 2008, 15:22 | | BFS - Blue - Blue To Receive R700 Million In Funding |
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BFS
BFS
BFS - Blue - Blue To Receive R700 Million In Funding
BLUE FINANCIAL SERVICES LIMITED
(Registration number 1996/006595/06)
(Incorporated in the Republic of South Africa)
JSE Code: BFS
ISIN: ZAE000083655
("Blue" or "the company")
BLUE TO RECEIVE R700 MILLION IN FUNDING
Blue Financial Services ("Blue" or "the Group") is to receive USD 70 million,
translating to approximately R700 million as a loan facility from the Overseas
Private Investment Corporation ("OPIC").
Blue CEO Dave van Niekerk says these funds are earmarked to grow the micro-
financier`s inroads into loans for small businesses.
"Internationally micro-finance is primarily aimed at small business lending and
Blue would like to grow this portion of our business. Many of the current
clients we serve currently borrow to grow small enterprises and even start small
business ventures. We anticipate that this new facility will result in a
significant number of loans to urban and rural enterprises, with more than half
the borrowers being women. The SMME business sectors to benefit from these loans
are varied, ranging across food services, transport, tourism, health and beauty,
manufacturing and advertising, and loans would be from as little as R15 000 to
R2 million."
The USD 70 million loan is the first advance of the USD250 million SMME lending
programme for SA that OPIC announced in May this year at the World Economic
Forum on Africa held in Cape Town. This is the second financial transaction
between OPIC and Blue, as earlier this year OPIC guaranteed a USD 10 million
loan from World Business Capital to Blue. These funds were used to expand Blue`s
microfinance operations in Kenya, Tanzania and Uganda.
The OPIC financing initiative aims to support SA financial institutions which
lend to small and medium sized businesses and provides previously underbanked
and disadvantaged entrepreneurs with access to capital, in turn enabling them to
grow their businesses and contribute towards job creation.
Blue has been in the SMME market in South Africa since May this year and has
advanced 50 loans with a total value of R23,2 million, creating 258 jobs and
supporting more than 1 290 family members. These range from fast food franchises
to a scrap metal dealer and even a DVD retail outlet in a freight container. It
also lends to SMME`s in Swaziland and Nigeria. Plans are underway to expand this
division to Lesotho, Botswana and Namibia.
Blue bases its SMME lending decision on five criteria - viability of the
business, entrepreneurial competence and credit history of the parties, the
contribution - in cash or in kind - which the borrowers will be putting into the
business, available collateral and security, and the need for and value-add of
such a business in that relevant country. It also offers business training
programmes to SMME borrowers and attendance is sometimes a mandatory condition
of the loan for entrepreneurs who are less experienced.
Johannesburg
1 December 2008
Designated Adviser
PSG Capital (Pty) Limited
Date: 01/12/2008 15:22:01 Produced by the JSE SENS Department.
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