SOUTH AFRICA – The International Finance Corporation (IFC) and Absa Bank Limited, one of the leading providers of residential mortgages in South Africa have partnered to support the expansion of housing finance targeting lower-to-middle income households
“We further elevated the importance of environment, social and governance during a review of Absa’s strategy last year,” said Punki Modise, Absa Group Chief Strategy and Sustainability Officer.
“Within this, inclusive finance is a significant impact area, including affordable housing mortgages, as well as financing SMEs, women-owned businesses and youth.”
Formal housing solutions are often too expensive for South Africans with low incomes due to high construction costs, limited access to financing, high levels of inequality, poverty, and job insecurity.
IFC’s funding is also the first social loan in South Africa made by any lender that complies with the Social Loan Principles (SLP) published by the Loan Market Association, which aims to establish best market practice for syndicated loans in Europe, the Middle East and Africa.
A social loan finances eligible projects that address social issues or achieves a positive social outcome, including affordable basic infrastructure like affordable housing, energy, clean water, transport, education, and health, food security and socio-economic empowerment.
The loan is expected to contribute to developing South Africa’s sustainable finance market by introducing a novel, replicable instrument to raise additional financing for affordable housing and other social causes, in a transparent and credible manner.
“The partnership further cements our relationship with IFC, a key global development finance institution, and follows a US$150 million certified green loan agreement in May last year, and a US$250 million trade finance loan in November,” said Jason Quinn, Absa Group Finance Director.
Absa Kenya invests in technological upgrades
The online platform also allows customers to open accounts from any location and start transacting without visiting a branch.
Absa Bank Kenya Managing Director Jeremy Awori said the move demonstrates the bank’s commitment to continue investing in digitally-led innovative solutions that are aligned with their evolving demands and expectations, as most of them prefer to transact on the go.
Customers who open a new account will have the option of accessing the newly introduced Absa Digital Savings Account, which has an introductory interest rate of 7 per cent per annum.
The account earns daily interest and pays it out quarterly. Customers can also deposit funds quickly after activating their accounts and securely access their balance at any time and from any location.