A new partnership between the African Development Bank and Standard Bank will provide billions in additional financing for SMEs while supporting women entrepreneurs through technical assistance and digital financial tools.
Image: Supplied
South Africa's small and medium sized enterprises are set to benefit from a R5.4 billion financing package after the African Development Bank and Standard Bank Group concluded a landmark transaction aimed at expanding access to business funding and supporting inclusive economic growth.
The African Development Bank has invested $332 million, equivalent to approximately R5.4 billion, in a capital markets security issued by Standard Bank Group.
The funding will be directed towards financing SMEs across South Africa, including women led businesses that continue to face significant barriers to accessing finance.
The transaction also marks Africa's first development finance institution supported social Flac instrument to be listed on the Johannesburg Stock Exchange.
Complementing the investment, the African Development Bank's Affirmative Finance Action for Women in Africa programme will provide a $1 million technical assistance grant from the We Fi window to help women entrepreneurs overcome financing obstacles.
The support will include digital payment tools to help businesses build verifiable credit histories as well as enterprise and supplier development programmes.
Kennedy Mbekeani, the African Development Bank's Director General for Southern Africa and Country Manager for South Africa, said the transaction would strengthen both the country's financial sector and its small business ecosystem.
"This investment reflects the African Development Bank's commitment to strengthening Africa's financial architecture while directing long term capital to where it is needed most, South Africa's small businesses and entrepreneurs," Mbekeani said.
"By partnering with Standard Bank Group, we are simultaneously helping to build a more resilient banking system and supporting the SMEs that drive jobs and inclusive growth."
The facility is structured as a Flac instrument, a new category of debt introduced by the South African Reserve Bank in January this year as part of the country's phased implementation of a bank resolution framework.
Standard Bank has committed to allocating the full R5.4 billion to SMEs, including women owned businesses, recognising the persistent gender financing gap within South Africa's small business sector.
Luvuyo Masinda, Chief Executive of Corporate and Investment Banking at Standard Bank Group, described the agreement as another milestone in the bank's partnership with the African Development Bank.
Bill Blackie, Chief Executive of Business and Commercial Banking at Standard Bank Group, Kennedy Mbekeani, African Development Bank Director General for Southern Africa and Country Manager for South Africa, and Luvuyo Masinda, Chief Executive of Corporate and Investment Banking at Standard Bank Group.
Image: Supplied.
"We are delighted to close another landmark transaction with the AfDB, following the successful 2024 transactions. This social Flac issuance will further enable the group to deliver on our purpose, Africa is our home, we drive her growth," Masinda said.
"SMEs are a critical driver of economic growth and job creation. They are the backbone of South Africa's economy, with approximately 3.2 million SMEs accounting for 60% of jobs, so ensuring these businesses have support and access to finance is imperative to our collective growth aspirations."
Bill Blackie, Chief Executive of Business and Commercial Banking at Standard Bank, said the additional funding would strengthen the bank's ability to support entrepreneurs while also creating new opportunities for women owned businesses.
"We see first hand the critical role that SMEs play in driving prosperity and job creation. This deal, together with our partnership with the AfDB, strengthens our ability to back the businesses that underpin inclusive economic growth," Blackie said.
"We are especially excited about the technical assistance grant, which will allow us to fund key initiatives that deliver direct, tangible benefits to women led SMEs, supporting their ambitions to start, manage and grow resilient businesses."
Ahmed Attout, Director of the Financial Sector Development Department at the African Development Bank, said the transaction was expected to encourage broader adoption of international banking best practice across Africa.
"This transaction is designed to be catalytic, encouraging the broader adoption of international best practice in banking across the African continent," Attout said.
The latest agreement builds on a long standing partnership between the African Development Bank and Standard Bank dating back to 2008. It follows the Bank's approval of a R3.6 billion subordinated debt facility for Standard Bank Group in November 2024, alongside a $200 million risk participation agreement supporting trade finance across Africa.
By the end of 2025, Standard Bank had fully utilised the earlier facility, supporting 5 425 SMEs and exceeding its original target of 4 000 businesses, with funding directed towards enterprises operating in agriculture, retail, wholesale trade and manufacturing.
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