IFC, Nimble Group, and South African Lenders launch facility to help resolve distressed assets
To support businesses in debt and lenders that are managing non-performing loan (NPL) portfolios, IFC, asset manager Nimble Group, and South African financial partners launched a facility that will invest in distressed assets in six countries in sub-Saharan Africa, including South Africa.
The facility of up to ZAR 2.8 billion capital (equivalent to $165 million) will acquire NPLs in Botswana, Eswatini, Kenya, Lesotho, Namibia, and South Africa and invest in financially distressed businesses in South Africa.
The facility comes as businesses across Africa continue to recover from the effects of the COVID-19 pandemic but now face fresh challenges, including from global inflation and rising prices for fuel, food, and other essential items.
The facility is funded by IFC, Nimble Group, South African banks Standard Bank and Rand Merchant Bank, financial services company Sanlam, and South Africa-based asset manager Stanlib. It falls under IFC's Distressed Asset Recovery Program (DARP), which focuses on acquiring and resolving distressed assets, refinancing, and restructuring enterprises.
"With this new facility, we will be able to support more consumers and businesses in sub-Saharan Africa and offer them solutions and alternatives to sustainably deal with their debts," said Rowan Gordon, Founder and CEO of Nimble Group. "We are hopeful that our expansion across Africa will also free the resources on credit grantors' balance sheets and make these available to positively expand their businesses."
"With this facility, we aim to promote financial stability and prevent the loss of assets, freeing up capital for new lending and allowing individuals and businesses to restore their creditworthiness," said Aliou Maiga, IFC Regional Director for Financial Institutions. "With Nimble and our other South African partners, we are expanding access to finance and credit during these challenging economic times."
In 2019, IFC and Nimble Group launched a similar facility valued at $90 million. DARP was launched in 2009 to address the rise in NPLs following the 2008-2009 financial crisis and has since grown into a $8.4 billion global investment program, including commitments of $2.3 billion from IFC's own account.
IFC, a member of the World Bank Group is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2022, IFC committed a record $32.8 billion to private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity as economies grapple with the impacts of global compounding crises.