AfDB Invests $332 Million in Standard Bank to Expand SME Financing in South Africa

The African Development Bank (AfDB)  has invested USD 332 million (ZAR 5.4 billion) in a capital markets security issued by Standard Bank Group Limited  to expand financing for small and medium-sized enterprises (SMEs) across South Africa. The investment is expected to strengthen access to finance for businesses, including women-led enterprises, while supporting the country’s evolving banking sector.

Alongside the investment, the Bank’s Affirmative Finance Action for Women in Africa (AFAWA) programme is providing a USD 1 million (ZAR 16 million) technical assistance grant through the Women Entrepreneurs Finance Initiative (We-Fi) window. The grant will help address barriers faced by women entrepreneurs by supporting the adoption of digital payment tools to build verifiable credit histories and providing enterprise and supplier development support for women-led SMEs.

Together, the investment and technical assistance package are designed to enhance Standard Bank’s capacity to finance SMEs and promote inclusive economic growth.

The facility is structured as a Flac instrument, a new category of debt introduced by the South African Reserve Bank in January 2026 as part of the country’s phased implementation of a bank resolution regime. The security has 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 financing social initiatives.

“This investment reflects the African Development Bank’s commitment to strengthening Africa’s financial architecture while directing long-term capital to where it is needed most — South Africa’s small businesses and entrepreneurs. By partnering with Standard Bank Group, we are simultaneously helping to build a more resilient banking system and supporting the SMEs that drive jobs and inclusive growth.”

– Kennedy Mbekeani, Director General for Southern Africa and Country Manager for South Africa, AfDB

Standard Bank Group has committed to deploying the entire ZAR 5.4 billion towards financing SMEs, including women-led businesses, as part of efforts to address the persistent gender financing gap within South Africa’s small business sector.

“We are delighted to close another landmark transaction with the AfDB, following the successful 2024 transactions. This social Flac issuance will further enable the group to deliver on our purpose – ‘Africa is our home; we drive her growth’. SMEs are a critical driver of economic growth and job creation. They are the backbone of South Africa’s economy, with approximately 3.2 million SMEs accounting for 60% of jobs, so ensuring these businesses have support and access to finance is imperative to our collective growth aspirations.”

– Luvuyo Masinda, Chief Executive of Corporate and Investment Banking, Standard Bank Group

“We see first-hand the critical role that SMEs play in driving prosperity and job creation. This deal, together with our partnership with the AfDB, strengthens our ability to back the businesses that underpin inclusive economic growth. We are especially excited about the technical assistance grant, which will allow us to fund key initiatives that deliver direct, tangible benefits to women-led SMEs, supporting their ambitions to start, manage and grow resilient businesses.”

– Bill Blackie, Chief Executive of Business and Commercial Banking, Standard Bank

“This transaction is designed to be catalytic, encouraging the broader adoption of international best practice in banking across the African continent.”

– Ahmed Attout, Director of the Financial Sector Development Department, African Development Bank

The latest investment builds on a longstanding partnership between the African Development Bank and Standard Bank Group that began in 2008. It follows the Bank’s approval in November 2024 of a ZAR 3.6 billion subordinated debt facility for Standard Bank Group, alongside a USD 200 million risk participation agreement with The Standard Bank of South Africa to support trade finance across the continent.

According to the African Development Bank, the 2024 facility had been fully utilised by December 2025, supporting 5,425 SMEs, surpassing the original target of 4,000 businesses. Financing was directed towards enterprises operating in agriculture, retail, wholesale trade, and manufacturing sectors.