The African Development Bank (AfDB) has invested $332 million (ZAR 5.4 billion) in a financing deal with Standard Bank Group to help more small and medium-sized enterprises (SMEs) in South Africa access funding.
The investment, announced on July 31, will strengthen Standard Bank’s ability to provide loans to SMEs while supporting women entrepreneurs through grants, digital financial tools, and business development programmes.
How the investment will support small businesses
The funding will allow Standard Bank, Africa’s largest bank by total assets, to expand lending to SMEs, many of which struggle to secure affordable financing.
Alongside the investment, AfDB’s Affirmative Finance Action for Women in Africa (AFAWA) programme will provide a $1 million (ZAR 16 million) technical assistance grant through the Women Entrepreneurs Finance Initiative (We-Fi).
The grant will support women-led businesses by providing digital payment tools that help build credit histories, making it easier for entrepreneurs to qualify for future loans. It will also fund business development and supplier support programmes.
A new financing model for South Africa’s banking sector
The investment is structured as a Flac instrument, a new type of debt introduced by the South African Reserve Bank in January 2026 to strengthen the country’s banking system.
The security has been issued as a social bond on the Johannesburg Stock Exchange (JSE), meaning the funds raised are dedicated to projects that deliver social benefits. According to AfDB, this is Standard Bank’s first Flac instrument on the exchange focused on social impact.
Also check: Central Bank of Kenya approves 25 new digital lenders as mobile loans reach KSh150.56 billion
AfDB and Standard Bank highlight SMEs’ role in economic growth
AfDB’s Director General for Southern Africa and Country Manager for South Africa, Kennedy Mbekeani, said;
“The investment reflects the bank’s commitment to strengthening Africa’s financial system while directing long-term funding to small businesses.”
Standard Bank executives also described the agreement as an important step towards supporting businesses that create jobs and drive economic growth.
“This social Flac issuance will further enable the group to deliver on our purpose – ‘Africa is our home; we drive her growth’”, Luvuyo Masinda, Chief Executive of Corporate and Investment Banking at Standard Bank Group, said.
What the deal means for South Africa’s SMEs
South Africa is home to about 3.2 million SMEs, which account for roughly 60 percent of employment in the country. The additional technical assistance grant is expected to give women-led businesses better access to finance and the resources needed to grow.
Small and medium-sized businesses are a major source of employment in South Africa, but many still struggle to access affordable financing despite contributing approximately 34 percent of the country’s GDP
By increasing Standard Bank’s lending capacity, the African Development Bank hopes more businesses will be able to secure the funding they need to expand, create jobs, and contribute to economic growth.
The agreement also places a stronger focus on women entrepreneurs through grants, digital payment tools, and business support programmes designed to improve their access to finance.
Also Check: Jim Ovia says real estate is more profitable than banking
The investment builds on a partnership between AfDB and Standard Bank that dates back to 2008. In 2024, the bank approved a ZAR 3.6 billion financing facility and a $200 million trade finance agreement with Standard Bank. By the end of 2025, that earlier facility had already supported 5,425 SMEs, exceeding its initial target of 4,000 businesses.
The African Development Bank believes the latest transaction could encourage more financial institutions across Africa to adopt similar financing models that support both banking stability and business growth.