Landmark partnership to boost SMME funding and trade across Africa

African Development Bank and Standard Bank Group have entered into a landmark financial agreement to enhance funding for small, medium, and micro enterprises (SMMEs) while expanding trade throughout Africa.

The agreement includes a R3.6bn investment in a social bond and a $200m risk participation agreement (RPA) for Standard Bank of South Africa Limited (SBSA). This initiative strengthens Standard Bank’s lending capacity, ensuring greater access to finance for SMMEs, a critical driver of economic growth and job creation in SA.

The social bond investment promotes inclusive economic development, particularly for SMMEs with a turnover below R300m and loan sizes under R40m. This financing will support up to 4,000 businesses, helping them scale operations, create jobs, and contribute to economic resilience.

Kenny Fihla, deputy CEO of Standard Bank Group and SBSA CEO, welcomed the investment: “This landmark partnership strengthens our ability to support SMMEs, the backbone of SA’s economy. With about 3.2 million SMMEs accounting for 60% of jobs, ensuring access to finance is crucial. This initiative aligns with our Sustainable Finance Framework and our commitment to financial inclusion.”

Enhancing trade finance across Africa

In addition to the social bond, the $200m RPA enhances trade finance across Africa, focusing on low-income countries and transition states. This agreement enables local banks to increase lending by sharing risk, bridging the trade finance gap and promoting intra-African trade.

Leila Mokaddem, director-general for Southern Africa at African Development Bank, highlighted the broader impact: “This collaboration marks a significant milestone in our long-standing partnership and is a testament to our shared commitment to supporting SMMEs’ growth and enhancing trade finance across Africa. Expanding financial inclusion and trade opportunities empowers businesses to drive economic transformation and regional integration. The Standard Bank Group remains a strategic partner in our shared vision for economic development on the continent.”

This initiative aligns with African Development Bank’s Ten-Year Strategy (2024-2033), which prioritises industrialisation, regional integration, and improving the quality of life in Africa. It also supports Standard Bank’s Sustainable Finance Framework, reinforcing both institutions’ commitment to fostering green and inclusive growth.

“We are proud of this transaction, demonstrating our shared commitment to sustainable financing. By supporting businesses, we create long-term economic opportunities and financial resilience,” says Ahmed Attout, director of the Financial Sector Development department at the African Development Bank.

Fihla says: “By providing much-needed capital, we are helping enterprises overcome challenges and thrive. This partnership illustrates the power of collaboration in driving meaningful economic and social change in Africa.”

This article was sponsored by Standard Bank.