South Africa has secured a $332 million financing package from the African Development Bank (AfDB) through Standard Bank Group, providing fresh capital to expand lending to small and medium-sized enterprises (SMEs), a sector widely regarded as the backbone of the country’s economy.

The investment, structured as a capital markets security issued by Standard Bank Group, will help increase access to financing for businesses operating across sectors including agriculture, manufacturing, wholesale trade and retail. The initiative also reinforces efforts to strengthen South Africa’s financial sector while supporting inclusive economic growth.

Alongside the investment, AfDB’s Affirmative Finance Action for Women in Africa (AFAWA) program is providing a $1 million technical assistance grant through the Women Entrepreneurs Finance Initiative (We-Fi).

The funding will help women-led businesses adopt digital payment solutions, build verifiable credit histories and access enterprise and supplier development programs designed to improve long-term business growth.

First social FLAC bond listed on the JSE

The financing is structured as a FLAC (First Loss After Capital) instrument, a new debt class introduced by the South African Reserve Bank in January 2026 as part of the country’s evolving bank resolution framework.

The security has been issued as a social bond on the Johannesburg Stock Exchange (JSE), marking Standard Bank Group’s first FLAC instrument listed on the exchange with proceeds dedicated to social development objectives, including expanding SME financing.

Kennedy Mbekeani, AfDB’s Director General for Southern Africa and Country Manager for South Africa, said the investment demonstrates the Bank’s commitment to strengthening Africa’s financial system while directing long-term capital to entrepreneurs and growing businesses.

Standard Bank expands support for SMEs

Luvuyo Masinda, Chief Executive of Corporate and Investment Banking at Standard Bank Group, said the transaction builds on the successful partnership established in 2024 and supports the bank’s mission to drive Africa’s economic growth.

He noted that South Africa’s estimated 3.2 million SMEs account for around 60% of employment, making access to finance critical for business expansion and job creation.

Bill Blackie, Chief Executive of Business and Commercial Banking at Standard Bank, said the additional technical assistance will enable the bank to provide practical support to women-owned businesses as they launch, manage and expand resilient enterprises.

Ahmed Attout, Director of AfDB’s Financial Sector Development Department, described the transaction as catalytic, saying it is expected to encourage broader adoption of international banking standards across Africa.

Longstanding partnership continues

Standard Bank Group, Africa’s largest lender by assets, operates in more than 20 countries, including 18 across Africa and several global financial centers.

Under Chief Executive Sim Tshabalala, the bank had fully deployed its 2024 AfDB-backed facility by December 2025, supporting 5,425 SMEs, surpassing its original target of 4,000 businesses.

The latest financing extends a partnership between AfDB and Standard Bank that began in 2008. It follows the Bank’s approval in November 2024 of a R3.6 billion ($217 million) subordinated debt facility for Standard Bank Group and a $200 million risk participation agreement supporting trade finance across Africa.