Real People & Proparco sign 5m (R46.7m) loan agreement

Financial services specialist Real People and French development finance institution Proparco sign 5m (R46.7m) loan agreement

In a move to boost the availability of affordable consumer credit services in South Africa, financial services group Real People has signed a 5m (R46,7m) convertible loan agreement with the French development finance institution Proparco.

This transaction follows the recent 7% investment in Real People by global private equity fund Aureos Capital. Proparco joins the ranks of a number of development finance institutions, government finance agencies and international banks in backing the Eastern Cape-headquartered Real Peoples mission to extend responsible, efficient credit products to ordinary South Africans.

The purpose of the term credit facility extended by Proparco to Real People is to foster the development of Real People in South Africa. The facility will be used, within the auspices of the new National Credit Act (NCA), to expand Real Peoples various lines of consumer finance products, including education products, housing and personal loans.

Says Proparco's Chief Executive Officer Luc Rigouzzo: "The overall objective behind this transaction is to lower the cost of credit for the South African emerging population; by sourcing the appropriate term financial resources allowing Real People to expand the maturity of its product offering; and consequently to lower the effective cost of such facilities for the final beneficiaries"

Adds Proparco's Regional Representative for Southern Africa Laurent Klein: "Proparco aims as well, in supporting an innovative Group, at further broadening the range of financial services and insurance products offered to the low to middle income market in South Africa".

Comments Real People's Managing Director Johan van Rooyen: "This agreement with Proparco represents another milestone in the ongoing development of Real Peoples business model. Our enterprise is based on the provision of innovative and competitive credit products for emerging markets, through a combination of operational efficiencies and efficient capital structures."

Real Peoples Strategy Director Neil Grobbelaar says: The transaction with Proparco is further evidence of the increasing appetite amongst both domestic and foreign funding providers to invest in the growth of the provision of appropriate credit-based offerings to our market. The agreement struck between Real People and Proparco is further evidence of the faith of these players in the ability of Real People to manage credit in this market. Significant to us too is that the responsible provision of credit is being recognised as an essential to uplifting living standards to assist in the provision of education and housing in South Africa.