African Bank Investment Limited (Abil) on Monday said it is set to raise R4 billion ($405 million) to build the company’s strong financial status in the future.

Abil, South Africa’s biggest provider of unsecured loans also said the strategy is in an effort to its fiscal position.

Leon Kirkinis, the CEO of Abil, added the company took this position as they believed it is a good move that will support the accomplishment of the lender’s plans.

It will also provide continuing value for its stakeholders, Kirkinis said.

The raising of this money will be finalised with a rights issue and the lender has also arrived at an underwriting contract with US-based financial services firm Goldman Sachs International.

Abil believes the raising of this money will stabilise its balance sheet.

The money will also be used to advance Basel III capital ratios and be an additional cushion in the event of tough economic climate.

“We believe that this is a prudent course of action and in the best interests of the group,” Kirkinis said.

Abil’s focus is to underwrite largely unsecure credit risk through the provision of personal loans to the formally employed emerging market.