JPMorgan launches $20 mln fund for South African black-owned firms

PUBLISHED: Wed, 18 Aug 2021 08:12:47 GMT
Promit Mukherjee
JP Morgan Photo: Solvency Ii Wire

JOHANNESBURG, Aug 17 (Reuters) – JPMorgan Chase & Co said on Tuesday it has launched a $20 million fund for black-owned enterprises in South Africa, a sign that global investment banks are still betting on the country despite its anemic economic growth in recent years.

The fund was launched in partnership with South Africa’s Department of Trade, Industry and Competition (DTIC), the bank said.

Read more: JPMorgan tells employees around the world to work from home if possible

Although the coronavirus pandemic has shrunk the economy of Africa’s most industrialized nation to its level from a decade ago, local banks, retailers and realty firms see a brighter future because of the country’s young population, rising entrepreneurship and strong middle class.

“The South African private sector has great capacity to multiply impact through partnerships, as we are aiming to do with the DTIC,” Kevin Latter, JPMorgan’s senior country officer in South Africa, said during a virtual conference.

The 300 million rand fund, which is accompanied by a grant of 40 million rand, will be disbursed as short-term loans with a duration of about three to four months and long-term loans with a duration of two to five years, Latter said.

Read more: South Africa riots will push economy into 3% contraction in Q3 -JPMorgan

He did not say at what interest rate the bank would offer the loans but said they would be “heavily subsidised and below commercial rate.”

The fund could potentially unlock 2 billion rand in capital over an eight-year period and would create hundreds of jobs, said Ebrahim Patel, the country’s minister of trade and industry.

($1 = 14.9654 rand)

(Reporting by Promit Mukherjee Editing by Paul Simao)

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