The African Development Bank Group (AfDB) and Standard Bank Group (SBG) have entered into a landmark financial agreement to enhance funding for small, medium-sized and microenterprises (SMMEs), while expanding trade throughout Africa.

The agreement includes a R3.6-billion investment in a social bond and a $200-million Risk Participation Agreement (RPA) for Standard Bank of South Africa (SBSA).

SBG says this initiative strengthens its lending capacity, ensuring greater access to finance for SMMEs, a critical driver of economic growth and job creation in South Africa.

The social bond investment promotes inclusive economic development, particularly for SMMEs with a turnover below R300-million and loan sizes under R40-million.

This financing will support up to 4 000 businesses, helping them scale operations, create jobs, and contribute to economic resilience.

“This landmark partnership strengthens our ability to support SMMEs, the backbone of South Africa’s economy. With approximately 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,” says SBG deputy CEO SBSA CEO Kenny Fihla.

In addition to the social bond, the $200-million RPA enhances trade finance across Africa, focusing on low-income countries and transition States.

SBG says this agreement enables local banks to increase lending by sharing risk, bridging the trade finance gap and promoting intra-African trade.

“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 SBG remains a strategic partner in our shared vision for economic development on the continent,” says AfDB director general for Southern Africa Leila Mokaddem.

SBG says this initiative aligns with the AfDB’s Ten-Year Strategy – from 2024 to 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 AfDB director of the financial sector development department Ahmed Attout.

“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,” Fihla continues.