AfDB approves R5bn facility for FirstRand to boost SMEs, women entrepreneurs in SA

The African Development Bank (AfDB) has approved a $310 million (R5.6 billion) financial package for FirstRand Bank to expand access to finance for micro, small and medium-sized enterprises (MSMEs), particularly women-led businesses and agribusinesses in South Africa.

The bank said support, announced on Thursday, reflects the its continued support for private-sector-led growth and confidence in FirstRand’s commercial arm, FNB, and its ability to drive inclusive growth and socio-economic transformation across South Africa.

The comprehensive package consists of three key components:

• $200 million line of credit to support MSMEs across various sectors;

• $100 million gender-focused line of credit for women-owned or women-led MSMEs; and

• $10 million concessional loan under the Agri-Food SME Catalytic Financing Mechanism (ACFM) targeting women-owned agribusinesses.

“This approval highlights the African Development Bank's dedication to bolstering the private sector and fostering inclusive economic growth in South Africa,” said Kennedy Mbekeani, AfDB’s director general for Southern Africa.

“By channeling these resources through FirstRand and, in particular, its commercial banking franchise, FNB, we are working with trusted partners with extensive reach to ensure that MSMEs —particularly those led by women —have access to the capital they need to grow, create jobs, and contribute to South Africa's economic development.”

A strong gender focus defines this facility, with over one-third ($110m) of the total financing ring-fenced for women entrepreneurs. The initiative aligns with the AfDB’s Affirmative Finance Action for Women in Africa (AFAWA) and ACFM programs, which aim to close Africa’s gender finance gap.

The concessional funding is specifically designed to improve access to affordable credit for women-owned small businesses in agriculture, a sector where smallholder farmers often face barriers to formal financing.

Most smallholder farmers in South Africa remain excluded from accessing bank credit, yet they make up a significant proportion of the farming population.

The financial package will also be supported by technical assistance and performance-based incentives through the AFAWA and ACFM programs of the AfDB.

These measures aim to enhance the bankability of women-led enterprises, strengthen FNB’s agriculture financing capabilities, and explore alternative credit scoring models.

“The approval of this financing package represents a significant milestone and elevation of this impactful partnership between the African Development Bank and FirstRand,” said Ahmed Attout, director of the financial sector development department at the AfDB.

“It demonstrates both institutions' shared commitment to driving inclusive economic growth and empowerment of the heavily credit-deprived business communities of South Africa by deliberately channeling credit to women entrepreneurs and smallholder farmers.”

A year ago, the AfDB and the African Guarantee Fund (AGF) launched the AFAWA Finance Series in a significant step towards fostering gender equity in entrepreneurship.

This initiative is poised to reshape the financial landscape for women-owned and women-led businesses, creating a robust pathway for sustainable and long-term growth in the small and medium enterprise (SME) sector.

Aimed at unlocking $5bn by 2026 to support 30 000 women-led SMEs, this initiative has already garnered substantial backing. The AfDB has approved $1.8bn and disbursed $1bn, benefiting more than 18 000 women entrepreneurs through 172 financial institutions across 43 African nations.

This recent operation announced on Thursday aligns with the AfDB’s High 5 development priorities and its 10-Year Strategy (2024–2033), which focus on inclusive growth, private sector development, and gender equality.

Bhulesh Singh, FirstRand Group Treasurer, said the financing will support South Africa’s economic recovery through small business growth.

“MSMEs are significant contributors to South Africa’s economic growth, supporting job creation and community upliftment,” Singh said.

“FirstRand’s commercial banking arm, FNB, has demonstrated a strong track record in providing capacity to women-owned businesses and small businesses in the agricultural sector, which in turn supports community development.”

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