The World Bank, through its private-sector lending arm the International Finance Corporation (IFC), was committed to driving investment in small and medium-sized enterprises (SMEs), which World Bank president Jim Yong Kim said was central to South Africa achieving its job creation and economic growth ambitions.
Speaking to South African entrepreneurs during a site visit at direct marketing service provider Mailtronic Direct Marketing, in Johannesburg, he stated that the World Bank’s development report focus for 2012 was on job creation.
“The lack of jobs is a global problem and we will do anything we can to create the condition so that companies, banks and others are ready to invest and create these jobs,” he stated.
In the 2012 financial year, the IFC committed about $1-billion to projects reaching SMEs in sub-Saharan Africa.
Kim arrived in South Africa from Côte d'Ivoire on Wednesday for the second and final leg of his first official visit outside the US since assuming his new position in July.
The head of the Washington-based global development bank met with national leaders, government Ministers and business representatives in both countries to discuss the importance of improving regional integration for Africa's future.
After meeting with President Jacob Zuma, Finance Minister Pravin Gordhan and other Cabinet Ministers, he commended South Africa’s leadership for its commitment to investing in the local SME sector. “This government is deeply committed to investing in the private sector, especially the SMEs, to make sure it can grow.”
Kim said the IFC would assist governments, such as South Africa's, to create an environment that would be conducive to investment, especially for smaller businesses. “We have the ‘Doing business report’ that is specifically focused on trying to help countries to do that,” he told Engineering News Online.
However, in South Africa, as with many other emerging markets, access to financial services for SMEs remained constrained.
Financial service provider, specialising in SMEs, Sasfin Bank CEO Roland Sassoon said investment challenges were currently being exacerbated by banks’ focus on bigger projects, such as Eskom’s build programme, and he did not foresee this changing in the near future.
Kim said the IFC was dedicated to supporting SME-focused financial institutions in South Africa through investment and advisory services to increase SMEs access to financial services.
He also announced on Thursday that the World Bank would start engagements on a new country strategy for South Africa, which was likely to be aligned to South Africa R3.2-trillion infrastructure plan that would run to 2020. Emphasis would fall on improving policy implementation and service delivery.