Fannie Mae has announced it will launch a $2bn loan for South Africa’s small and medium-sized enterprises (SMEs) this month.
In a statement on Thursday, the lender said the loan would be “a significant investment in our strategy to address the long-term challenges facing the economy in South Africa.”
“We’re delighted to be helping our customers in the face of an uncertain global economic climate,” Fannie said in a statement.
“The loan is a significant investment for our strategy and our customers will see significant benefit from it.”
The South African government is trying to boost growth and jobs in the wake of the global financial crisis.
Fannie and Freddie’s decision to lend will be a boost to the South African economy.
It will come as the country is trying the hardest to reduce unemployment, which has stood at 9.9 per cent this year, the highest level in the OECD.
But the economy has been hit by the country’s slow growth rate, which accounts for more than 90 per cent of the countrys gross domestic product.
South Africa has struggled to reduce poverty rates, and has been struggling to get the country to take on the burden of a huge debt load, with the IMF estimating that debt is currently at more than 240 per cent.
South African finance minister and finance minister Jacob Zuma has said he will make a final decision on whether to make the loan.
South Africans who have the money will receive the equivalent of a 10 per cent interest rate, the government said in the statement.
The Fannie statement did not detail what interest rate the loan will be.
The country’s central bank has already raised the interest rate to 4.9 percent from the 5.8 percent it had previously set.