A new collaboration between the African Development Bank (AfDB) and Standard Bank will provide billions in additional funding for small and medium enterprises (SMEs), while also supporting women entrepreneurs through technical assistance and digital financial tools.
South African SMEs will benefit from a R5.4 billion financing package after the African Development Bank and Standard Bank Group concluded a significant deal aimed at expanding access to business finance and promoting inclusive economic growth.
The African Development Bank invested $332 million, equivalent to approximately R5.4 billion, in a capital market security issued by Standard Bank Group. These funds will be directed towards financing SMEs across South Africa, including women-led businesses that continue to face significant hurdles in securing finance.
This deal also marks the first social Flac instrument in Africa supported by a development finance institution that has been listed on the Johannesburg Stock Exchange. In addition to these investments, the African Development Bank's Affirmative Finance Action for Women in Africa program will provide a $1 million technical assistance grant through the WeFi window to help women entrepreneurs overcome financial difficulties.
The support will include digital payment tools to help businesses build verifiable credit histories, as well as enterprise and supplier development programs. Kennedy Mbekeani, CEO of the African Development Bank for South Africa and Country Manager in South Africa, stated that this transaction will strengthen both the country's financial sector and the small business ecosystem.
Mbekeani noted: 'These investments reflect the African Development Bank's commitment to strengthening Africa's financial architecture while directing long-term capital where it is needed most—to small businesses and entrepreneurs in South Africa.' He added: 'Our partnership with Standard Bank Group helps us simultaneously build a more resilient banking system and support SMEs that drive employment and inclusive growth.'
The instrument is structured as Flac, a new debt category introduced by the South African Reserve Bank in January of this year as part of the phased implementation of the bank resolution framework. Standard Bank committed to allocating the full R5.4 billion to SMEs, including women-owned businesses, recognizing the persistent gender financing gap in South Africa's small business sector.
Luvuyo Masinda, Chief Executive Officer for Corporate and Investment Banking at Standard Bank Group, called the agreement another important step in the bank's partnership with the African Development Bank. Bill Blake, Chief Executive Officer for Commercial and Business Banking at Standard Bank Group, participated in closing the deal alongside Kennedy Mbekeani and Luvuyo Masinda.
Masinda stated: 'We are pleased to close another landmark agreement with AfDB following successful deals in 2024. This issuance of social Flac allows the group to realize its mission: Africa is our home, we contribute to its growth.' He emphasized that SMEs are a vital engine for economic growth and job creation, forming the backbone of the South African economy, where about 3.2 million SMEs provide 60% of jobs, making support and access to finance for these businesses paramount to overall growth objectives.
Bill Blake, CEO for Commercial and Business Banking at Standard Bank, said the additional funding will enhance the bank's ability to support entrepreneurs and create new opportunities for women-owned businesses. He noted: 'We see firsthand the critical role that SMEs play in driving prosperity and job creation. This deal, along with our partnership with AfDB, strengthens our capacity to support the businesses underpinning inclusive economic growth.' Blake also expressed enthusiasm for the technical assistance grant, which will fund key initiatives providing direct, tangible benefits to women's SMEs, supporting their drive to start, manage, and develop sustainable businesses.
Ahmed Attout, Director of Financial Sector Development at the African Development Bank, suggested that this transaction will promote the wider adoption of best international banking practices across Africa. Attout stated: 'This transaction is designed as a catalyst encouraging broader adoption of international best practices in the banking sector across the African continent.'
The latest agreement continues the long-standing partnership between the African Development Bank and Standard Bank, which began in 2008. It follows the Bank's approval of a R3.6 billion subordinated debt facility for Standard Bank Group in November 2024, as well as a $200 million risk-sharing agreement to support trade finance across Africa. By the end of 2025, Standard Bank had fully utilized the previously provided credit, supporting 5,425 SMEs and exceeding the initial target of 4,000 enterprises, with financing directed towards businesses operating in agriculture, retail, wholesale, and manufacturing.
