AfDB and Standard Bank Forge $500M Financial Partnership to Boost SMMEs and Trade in Africa

Beyond supporting SMMEs, the agreement’s $200 million RPA component will enhance trade finance across Africa, with a special focus on Low-Income Countries and Transition States.

The African Development Bank Group (AfDB) and Standard Bank Group (SBG) have entered into a groundbreaking financial partnership aimed at enhancing access to capital for small, medium, and micro enterprises (SMMEs) and strengthening trade finance across Africa. This initiative, signed on Monday, includes a R3.6 billion (approximately $190 million) investment in a social bond and a $200 million Risk Participation Agreement (RPA) to support Standard Bank of South Africa Limited (SBSA).

This strategic collaboration seeks to empower SMMEs—key drivers of economic growth and job creation—by providing greater access to financing. The social bond investment prioritizes businesses with annual turnovers below R300 million and loan sizes under R40 million, potentially benefiting up to 4,000 enterprises. The funding will enable these businesses to expand operations, create employment opportunities, and enhance economic resilience.

Kenny Fihla, Deputy Chief Executive Officer of Standard Bank Group and Chief Executive Officer of SBSA, emphasized the significance of the initiative:

"This landmark partnership strengthens our ability to support SMMEs, which are the backbone of South Africa's economy. With approximately 3.2 million SMMEs contributing 60% of jobs in the country, ensuring access to finance is crucial. This initiative aligns with our Sustainable Finance Framework and our commitment to financial inclusion."

Beyond supporting SMMEs, the agreement's $200 million RPA component will enhance trade finance across Africa, with a special focus on Low-Income Countries and Transition States. By sharing risk with local banks, this arrangement will help bridge trade finance gaps, increase liquidity, and promote intra-African trade.

Leila Mokaddem, Director General for Southern Africa at the African Development Bank, underscored the broader economic impact:

"This collaboration marks a significant milestone in our long-standing partnership with Standard Bank and is a testament to our shared commitment to supporting SMMEs' growth and enhancing trade finance across the continent. Expanding financial inclusion and trade opportunities empowers businesses to drive economic transformation and regional integration."

This initiative aligns 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 supports 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, reiterated the importance of sustainable financing:

"We are proud of this transaction, which demonstrates our shared commitment to sustainable financing. By supporting businesses, we create long-term economic opportunities and financial resilience."

Kenny Fihla concluded by reaffirming the significance of the partnership:

"By providing much-needed capital, we are helping enterprises overcome challenges and thrive. This collaboration illustrates the power of working together to drive meaningful economic and social change across Africa."

This landmark agreement not only strengthens the lending capacity of Standard Bank but also represents a critical step toward fostering a more inclusive and sustainable economic landscape across Africa.