ABSA will get a R2 billion ($124 million) loan from the International Finance Corp. to help South Africa’s third-largest bank by assets expand its affordable-mortgage business.
IFC’s first social-sector loan in South Africa is targeted at lower to middle-income households, Adamou Labara, the lender’s country head, said in a statement.
South Africa, where the official unemployment rate remains the highest among 82 countries monitored by Bloomberg, has a shortfall of 3.7 million homes, according to the statement. The shortage is most acute in the lower end of the market, which faces a lack of access to financing.
The loan complies with the Social Loan Principles published by the Loan Market Association, which aims to establish best market practice for syndicated loans in Europe, the Middle East and Africa. Such a loan finances projects that address key social issues including a lack of access to affordable basic infrastructure like energy, clean water and housing.
Absa in March announced plans to fund R100 billion of new environmental, social and governance-related products by 2025, more than doubling it’s book of R47 billion.