AfDB, Standard Bank agree to boost SMME financing and trade in Africa

The African Development Bank Group (AfDB) and Standard Bank Group (SBG) have signed a transformative financial agreement to strengthen funding for small, medium, and micro enterprises (SMMEs) and enhance trade across Africa.

The agreement includes a R3.6 billion (over $195 million) social bond investment and a $200 million Risk Participation Agreement (RPA) for Standard Bank of South Africa Limited (SBSA). This initiative bolsters Standard Bank’s lending capacity, ensuring increased financial access for SMMEs, a key driver of economic growth and job creation in South Africa.

Boosting SMMEs for Economic Growth
The social bond investment is designed to promote inclusive economic development, targeting SMMEs with an annual turnover of less than R300 million and loan sizes under R40 million. This funding is expected to benefit up to 4,000 businesses, helping them scale operations, create jobs, and enhance economic resilience.

Kenny Fihla, Deputy CEO of Standard Bank Group and CEO of SBSA, emphasized the significance of the deal, stating:

“This landmark partnership strengthens our ability to support SMMEs, the backbone of South Africa’s economy. With approximately 3.2 million SMMEs contributing to 60% of jobs, ensuring access to finance is critical. This initiative aligns with our Sustainable Finance Framework and commitment to financial inclusion.”

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Enhancing Trade Finance Across Africa
Alongside the social bond, the $200 million RPA aims to expand trade finance, particularly in Low-Income Countries and Transition States. By sharing risks, the agreement enables local banks to increase lending, bridging the trade finance gap and fostering intra-African trade.

Leila Mokaddem, Director General for Southern Africa at AfDB, highlighted the broader impact of the collaboration:

“This marks a major milestone in our long-standing partnership with Standard Bank and underscores our shared commitment to supporting SMMEs and trade finance across Africa. Expanding financial inclusion and trade opportunities empowers businesses to drive economic transformation and regional integration.”

A Strategic Commitment to Economic Development
The initiative aligns with the African Development Bank’s Ten-Year Strategy (2024–2033), which focuses on industrialization, 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.

Ahmed Attout, Director of the Financial Sector Development Department at AfDB, described the deal as a demonstration of shared dedication to sustainable financing:

“By supporting businesses, we create long-term economic opportunities and financial resilience.”

Reaffirming the importance of the partnership, Kenny Fihla added:

“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.”