AfDB and Standard Bank Invest $332M to Boost SME Finance in South Africa

The investment is expected to strengthen access to credit for businesses that play a central role in job creation and economic growth.

The African Development Bank (AfDB) has invested $332 million (ZAR 5.4 billion) in a capital markets security issued by Standard Bank Group, creating fresh financing for small and medium-sized enterprises (SMEs) across South Africa. The investment is expected to strengthen access to credit for businesses that play a central role in job creation and economic growth.

Alongside the investment, the Bank's Affirmative Finance Action for Women in Africa (AFAWA) programme is providing a $1 million (ZAR 16 million) technical assistance grant through the Women Entrepreneurs Finance Initiative (We-Fi). The funding will help women-led businesses adopt digital payment tools, build stronger credit records and receive enterprise and supplier development support.

New financial instrument supports banking sector

The financing has been structured as a Flac instrument, a new type of debt introduced by the South African Reserve Bank in January 2026 as part of reforms to strengthen the country's banking resolution framework. The security has also been issued as a social bond listed on the Johannesburg Stock Exchange (JSE), making it Standard Bank Group's first Flac instrument on the exchange dedicated to social development.

African Development Bank Director General for Southern Africa and Country Manager for South Africa, Kennedy Mbekeani, said the investment strengthens Africa's financial system while directing long-term funding towards entrepreneurs and small businesses that support inclusive economic growth. He said the partnership with Standard Bank also contributes to building a more resilient banking sector.

Women-led businesses receive dedicated support

Standard Bank Group has committed to directing the full ZAR 5.4 billion towards SMEs, with a strong focus on businesses owned or led by women to help narrow South Africa's gender financing gap.

Luvuyo Masinda, Chief Executive of Corporate and Investment Banking at Standard Bank Group, said SMEs remain the backbone of South Africa's economy, with around 3.2 million businesses accounting for nearly 60% of jobs. He noted that expanding access to finance is essential for supporting entrepreneurship, employment and economic development.

Bill Blackie, Chief Executive of Business and Commercial Banking at Standard Bank, said the technical assistance grant will provide practical support for women entrepreneurs, helping them start, manage and grow stronger businesses through targeted development programmes.

Partnership builds on earlier success

The latest investment strengthens a partnership between the African Development Bank and Standard Bank Group that began in 2008. It follows the Bank's approval in 2024 of a ZAR 3.6 billion subordinated debt facility for Standard Bank Group and a $200 million risk participation agreement supporting trade finance across Africa.

By the end of 2025, Standard Bank had fully utilised the earlier financing package, supporting 5,425 SMEs, surpassing its original target of 4,000 businesses. The loans helped companies operating in agriculture, manufacturing, retail and wholesale trade, demonstrating strong demand for accessible financing among South Africa's small business sector.