In a move set to ignite African commerce, the African Development Bank Group and Standard Bank Group (SBG) have sealed a major financial pact. The deal promises to turbocharge SME funding and propel trade across the continent.
The agreement includes a substantial 3.6 billion rand investment in a social bond and a $200 million Risk Participation Agreement (RPA) for Standard Bank of South Africa Limited (SBSA). This initiative will significantly bolster Standard Bank’s lending capabilities, ensuring that SMEs – the lifeblood of economic growth and job creation in South Africa – gain greater access to crucial financing.
Kenny Fihla, Deputy Chief Executive of Standard Bank Group and Chief Executive of SBSA, hailed the investment as a game-changer: “This landmark partnership supercharges our ability to support SMEs, the very backbone of the South African economy. With approximately 3.2 million SMEs accounting for a staggering 60% of jobs, securing access to finance is paramount. This initiative aligns perfectly with our Sustainable Finance Framework and our unwavering commitment to financial inclusion.”
The social bond investment will champion inclusive economic development, particularly for SMEs with turnovers below 300 million rand and loan sizes under 40 million rand. This financial boost is expected to support up to 4,000 businesses, enabling them to scale their operations, create jobs, and bolster economic resilience.
In addition to the social bond, the $200 million loan agreement will amplify trade finance across Africa, with a keen focus on low-income countries and transition states. By sharing risks, this agreement empowers local banks to ramp up their lending, bridge the trade finance gap, and catalyse intra-African trade.
Leila Mokaddem, Director General for Southern Africa at the African Development Bank, underscored the broader impact: “This collaboration marks a pivotal milestone in our longstanding partnership and underscores our shared commitment to empowering SME growth and enhancing trade finance across Africa. By expanding financial inclusion and trade opportunities, we’re enabling businesses to drive economic transformation and regional integration. Standard Bank Group is a strategic ally in our collective vision for the continent’s economic development.”
“We’re incredibly proud of this transaction, which exemplifies our joint dedication to sustainable finance. By empowering businesses, we’re creating long-term economic opportunities and fostering financial resilience,” said Ahmed Attout, Director of the Financial Sector Development Department at the African Development Bank.
This initiative dovetails with the African Development Bank’s Ten-Year Strategy (2024-2033), which prioritises industrialisation, regional integration, and enhancing the quality of life for Africans. It also bolsters Standard Bank’s Sustainable Finance Framework, reinforcing both institutions’ commitment to driving green and inclusive growth.
