The African Development Bank (AfDB) and Standard Bank Group have signed a landmark $332 million (ZAR 5.4 billion) financing agreement to increase access to funding for small and medium-sized enterprises (SMEs) across South Africa. The transaction aims to strengthen entrepreneurship, support job creation, and promote inclusive economic growth.
The AfDB investment was made through a capital markets security issued by Standard Bank Group, Africa’s largest bank by total assets. The facility is structured as a Financial Loss Absorbing Capacity (Flac) instrument and represents the first development finance institution-supported social Flac instrument listed on the Johannesburg Stock Exchange (JSE).
The financing will enable Standard Bank to expand lending to SMEs, including women-led businesses, which play a critical role in South Africa’s economy. Standard Bank has committed to directing the full ZAR 5.4 billion toward supporting small businesses and improving access to finance for entrepreneurs.
Complementing the financing facility, the AfDB’s Affirmative Finance Action for Women in Africa (AFAWA) programme is providing a $1 million technical assistance grant through the We-Fi window. The support will help address challenges faced by women entrepreneurs by providing digital payment solutions, helping businesses build credit histories, and offering enterprise and supplier development support.
AfDB Director General for Southern Africa and Country Manager for South Africa, Kennedy Mbekeani, said the investment demonstrates the Bank’s commitment to strengthening Africa’s financial systems while directing long-term capital toward SMEs and entrepreneurs that drive economic development.
Standard Bank Group officials highlighted the importance of SMEs in supporting employment and economic growth. According to the bank, South Africa has approximately 3.2 million SMEs, which contribute significantly to job creation and economic activity.
The agreement builds on a long-standing partnership between the African Development Bank and Standard Bank Group, which began in 2008. It follows previous AfDB-supported initiatives, including a ZAR 3.6 billion subordinated debt facility approved in 2024 and a $200 million risk participation agreement supporting trade finance activities across Africa.
The latest transaction is expected to strengthen SME financing capacity, encourage broader adoption of international banking standards, and provide greater opportunities for businesses in sectors such as agriculture, retail, manufacturing, and wholesale trade.
By combining financial support with targeted assistance for women entrepreneurs, the partnership aims to create a more inclusive financing environment and help South Africa’s small businesses contribute more strongly to sustainable economic growth.
