IFC Grants $100M Loan to FirstRand to Boost MSME Finance in South Africa

The International Finance Corporation (IFC) has announced a $100 million loan (approximately R1.8 billion) to FirstRand Bank Limited (FRB), aimed at unlocking much-needed access to finance for micro, small, and medium enterprises (MSMEs) in South Africa. The funding will be channeled through First National Bank (FNB), a division of FRB, with a focus on supporting sectors that typically struggle to secure financing.

Addressing South Africa’s MSME Finance Gap

South Africa is home to a well-developed financial sector, yet MSMEs remain severely underserved when it comes to credit. According to the MSME Finance Gap report, only 5 percent of formal MSMEs have access to bank financing, despite contributing about 34 percent of national economic output and 60 percent of employment.

By providing additional liquidity to FNB, the IFC loan will help close this gap, ensuring that thousands of small enterprises can access credit to grow, expand operations, and sustain jobs.

Partnership for Growth and Employment

Mary Vilakazi, CEO of FirstRand, said the new financing underscores the bank’s continued commitment to small businesses: “Our longstanding partnership with IFC continues to enable the bank to support MSMEs, which have been a key contributor to FNB’s growth and to the wider needs of South Africa.”

The IFC echoed this sentiment, emphasizing the transformative role of small businesses in economic resilience. Aliou Maiga, IFC’s Regional Industry Director for Africa’s Financial Institutions Group, stated: “South Africa's small business sector is central to employment, innovation, and economic growth. Through this investment, IFC and FirstRand Bank will help create jobs, strengthen value chains, and improve livelihoods.”

Building on a Longstanding Partnership

FRB is already South Africa’s largest lender to MSMEs, and this investment deepens its decades-long partnership with IFC. The collaboration reflects IFC’s broader strategy to support South Africa’s efforts to tackle unemployment, reduce inequality, and promote inclusive economic growth.

This latest loan builds on past projects where IFC has helped FRB expand access to inclusive finance, including loans for women-owned enterprises and high-impact industries such as agriculture, manufacturing, and services.

IFC’s Broader Investment in South Africa

IFC’s overall presence in South Africa is substantial, with an investment portfolio exceeding $4 billion (R76 billion) and an advisory portfolio of about $24 million (R434 million). Its focus areas include:

• Inclusive finance for underserved individuals and small enterprises.

• Climate resilience and sustainability, particularly in energy and utilities.

• Construction and real estate development to support urban growth.

• Access to electricity and infrastructure improvements.

• Strengthening the business environment to attract investment and stimulate innovation.

Unlocking Opportunity for South Africa’s Future

The IFC loan to FirstRand represents a direct intervention in one of South Africa’s most pressing challenges—ensuring small businesses can thrive. By providing targeted support to MSMEs, the initiative will not only expand credit access but also drive innovation, create jobs, and support long-term economic stability.

With unemployment stubbornly high and inequality deeply entrenched, the success of small and medium-sized enterprises will play a critical role in South Africa’s broader development goals. Through this partnership, IFC and FirstRand are seeking to provide the tools necessary for those businesses to scale, compete, and sustain livelihoods across the country.