The African Development Bank Group and Standard Bank Group have joined forces in a groundbreaking financial agreement aimed at boosting funding for small, medium, and micro enterprises (SMMEs) and promoting trade expansion across Africa.
The agreement involves a significant R3.6 billion investment in a social bond and a $200 million Risk Participation Agreement (RPA) for Standard Bank of South Africa Limited (SBSA). This collaboration will bolster Standard Bank’s lending capacity, providing greater access to finance for SMMEs, which play a crucial role in driving economic growth and job creation in South Africa.
The social bond investment is designed to foster inclusive economic development, specifically targeting SMMEs with a turnover below R300 million and loan sizes under R40 million. This funding will support up to 4,000 businesses, enabling them to scale their operations, create employment opportunities, and contribute to economic resilience.
Kenny Fihla, Deputy Chief Executive Officer of Standard Bank Group and CEO of SBSA, expressed his enthusiasm for the investment, emphasizing the importance of supporting SMMEs in South Africa. With approximately 3.2 million SMMEs accounting for 60% of jobs in the country, ensuring access to finance is essential for their success. This initiative aligns with Standard Bank’s Sustainable Finance Framework and commitment to financial inclusion.
In addition to the social bond, the $200 million RPA will enhance trade finance across Africa, with a focus on Low-Income Countries and Transition States. By sharing risk with local banks, this agreement aims to facilitate increased lending, bridge the trade finance gap, and promote intra-African trade.
Leila Mokaddem, Director General for Southern Africa at the African Development Bank, emphasized the broader impact of this collaboration. She highlighted the significance of supporting SMME growth and enhancing trade finance across the continent, underscoring the importance of expanding financial inclusion and trade opportunities for driving economic transformation and regional integration.
This initiative is in line with the African Development Bank’s Ten-Year Strategy (2024–2033), which prioritizes industrialization, regional integration, and improving the quality of life in Africa. It also aligns with Standard Bank’s Sustainable Finance Framework, reinforcing both institutions’ commitment to fostering green and inclusive growth.
Ahmed Attout, Director of the Financial Sector Development Department at the African Development Bank, commended the transaction as a testament to the shared commitment to sustainable financing. By providing capital to businesses, the collaboration aims to create long-term economic opportunities and financial resilience.
Kenny Fihla reiterated the importance of the partnership, highlighting how it supports enterprises in overcoming challenges and thriving. This collaboration showcases the power of working together to drive meaningful economic and social change in Africa.
For media inquiries, please contact Natalie Naudé at the Communication and External Relations Department via email at media@afdb.org.
About the African Development Bank Group:
The African Development Bank Group is Africa’s leading development finance institution, comprising the African Development Bank (AfDB), the African Development Fund (ADF), and the Nigeria Trust Fund (NTF). With a presence in 41 African countries and an external office in Japan, the Bank plays a pivotal role in the economic development and social progress of its 54 regional member states. For more information, visit www.AfDB.org.
