The African Development Bank (AfDB) and Standard Bank Group have signed a 332 million dollars (ZAR5.4 billion) facility to expand access to financing for small and medium-sized enterprises (SMEs) in South Africa.
AfDB said this in a statement on Friday, saying the transaction was structured as a First Loss After Capital (FLAC) instrument and listed as a social bond on the Johannesburg Stock Exchange.
The bank described the deal as Africa’s first development finance institution-supported social FLAC instrument listed on the exchange, marking a significant milestone in innovative financing for inclusive growth.
AfDB said it was also providing a one million dollar (ZAR16 million) AFAWA technical assistance grant to support women-led SMEs through digital solutions and enterprise development initiatives.
Speaking at the signing ceremony, AfDB’s Director-General for Southern Africa, Mr Kennedy Mbekeani, described the investment as another milestone in the bank’s longstanding partnership with Standard Bank Group.
Mbekeani recalled that both institutions partnered in 2024 on a ZAR3.6 billion facility that supported thousands of SMEs operating across agriculture, manufacturing, retail and trade sectors.
“Building on that success, we are signing a larger and more innovative facility today,” Mbekeani said.
He said the investment supported South Africa’s evolving financial architecture while demonstrating how capital markets could be leveraged to advance inclusive economic growth and development.
According to him, the transaction reflects AfDB’s confidence in South Africa’s financial sector and the capacity of entrepreneurs to drive sustainable economic transformation.
Mbekeani said SMEs accounted for about 3.2 million enterprises and nearly 60 per cent of employment in South Africa but continued to face limited access to long-term financing.
“Providing patient local currency capital enables Standard Bank to extend financing matching businesses’ long-term growth ambitions,” he said.
He said the facility placed special emphasis on women-led enterprises through AfDB’s Affirmative Finance Action for Women in Africa (AFAWA) programme and related interventions.
According to him, investing in women entrepreneurs strengthens businesses, improves resilience and creates employment opportunities, generating wider economic and social benefits across African economies.
Mbekeani said the transaction also advanced AfDB’s vision for a New African Financial Architecture for Development by mobilising domestic capital and deepening financial markets.
He said the facility would channel resources into productive sectors of the economy while strengthening the capacity of businesses to expand operations and create jobs.
“Ultimately, this transaction expands opportunities for entrepreneurs, supports job creation and strengthens inclusive growth,” Mbekeani said.
Standard Bank’s Corporate and Investment Banking Chief Executive, Mr Luvuyo Masinda, described the facility as another landmark transaction between the bank and AfDB.
He said SMEs remained the backbone of South Africa’s economy, making improved access to finance critical to business expansion, employment generation and sustainable economic growth.
“We are delighted to conclude another landmark transaction with the AfDB following the successful 2024 transactions,” Masinda said.
Masinda said the social FLAC issuance would reinforce Standard Bank’s commitment to supporting Africa’s growth agenda through increased financing for SMEs and underserved businesses.
Standard Bank’s Business and Commercial Banking Chief Executive, Mr Bill Blackie, welcomed the partnership and the accompanying technical assistance grant for women entrepreneurs.
Blackie said the grant would fund initiatives that delivered tangible benefits to women-led SMEs, helping them establish, manage and grow resilient and sustainable enterprises.
AfDB’s Director of Financial Sector Development, Mr Ahmed Attout, described the transaction as catalytic and capable of strengthening banking practices across the African continent.
Attout said the partnership between AfDB and Standard Bank dates back to 2008 and had continued to expand through several innovative financing initiatives.
The bank said Standard Bank fully utilised the 2024 ZAR3.6 billion facility by December 2025, supporting 5,425 SMEs and surpassing its initial target of 4,000 businesses.
