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JP Morgan unveils over $20m for S/African businesses – Minister

Some 500 South African businesses will benefit from a US$24.4-million facility to boost the industrial and green economy sectors, Trade,…

Some 500 South African businesses will benefit from a US$24.4-million facility to boost the industrial and green economy sectors, Trade, Industry and Competition Minister Ebrahim Patel has announced.Speaking in Pretoria on Tuesday, Patel said the JP Morgan becomes the first international investment bank to undertake an under the Equity Equivalent Investment Programme (EEIP) alongside government through this multimillion-dollar commitment. 

“The terms on which this funding will be extended is concessional, and includes limited security requirements and loan repayment holidays that respond to the life stage of the enterprises supported and the operational challenges they might face,” Patel said.

The funding will facilitate an injection into the South African economy aimed at small and medium-sized enterprises who face critical funding challenges, or who might not meet the traditional underwriting criteria of the commercial banks, the minister said.

“The boost to manufacturing, in particular, is timely as one of the key lessons of the Covid-19 period has been the value of having domestic industrial capabilities,” he said.

JP Morgan plans to unlock up to US$143 million in capital or financing for short, medium- and long-term funding over an eight-year period, Patel said.

The minister explained that the funding was intended to support small and medium-sized businesses in sectors of significant public importance, ranging from transactions in the green economy to funding for firms with manufacturing operations. 

“South Africa needs more jobs for young people and deeper levels of industrialisation. This transaction will give a boost to the country’s localisation efforts, creating employment and helping to strengthen economic output,” Patel said.

He added: “I welcome the commitment to the creation of 1,000 new jobs and the focus on supporting a segment of the market that is not adequately served by the financial system.”

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