JPMorgan launches $20m fund for SA black-owned firms
JPMorgan Chase & Co has launched a $20m (about R297m) fund for black-owned enterprises in South Africa, a sign that global investment banks are still betting on the country despite its anaemic economic growth in recent years.
The fund was launched in partnership with the department of trade, industry and competition (DTIC), the bank said.
Though the coronavirus pandemic has shrunk the economy of Africa’s most industrialised 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 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 SA, said during a virtual conference.
The fund, which is accompanied by a grant of R40m, 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.
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 R2bn in capital over an eight-year period and would create hundreds of jobs, said trade and industry minister Ebrahim Patel.