The partnership between African Development Bank and Standard Bank aims to strengthen trade finance and provide critical funding to small, medium, and micro enterprises across the continent.
Strengthening Financial Support for SMMEs
The African Development Bank Group (ADBG) and Standard Bank Group (SBG) have signed a landmark financial agreement to expand funding opportunities for small, medium, and micro enterprises (SMMEs) and enhance trade across Africa. The deal, worth R3.6 billion ($217 million) in a social bond and a $200 million Risk Participation Agreement (RPA), marks a significant step in increasing financial inclusion and economic growth in the region.
The social bond investment directly targets SMMEs in South Africa with turnovers below R300 million and loan sizes under R40 million. This initiative is expected to benefit up to 4,000 businesses, enabling them to expand, create jobs, and contribute to economic resilience.
Kenny Fihla, Deputy Chief Executive Officer of Standard Bank Group and Chief Executive Officer of SBSA, emphasized the impact: “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.”
Enhancing Trade Finance Across Africa
Beyond SMME financing, the agreement includes a $200 million RPA aimed at increasing trade finance in Low-Income Countries and Transition States across Africa. By sharing risk with local banks, this initiative will help bridge the trade finance gap, providing essential capital to businesses and supporting intra-African trade.
Leila Mokaddem, Director General for Southern Africa at the African Development Bank, underscored the importance of this collaboration: “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.”
Aligning with Strategic Development Goals
The initiative supports the African Development Bank’s Ten-Year Strategy (2024–2033), which prioritizes industrialization, regional integration, and improving the quality of life across Africa. The collaboration also aligns with Standard Bank’s Sustainable Finance Framework, reinforcing both institutions’ dedication to fostering green and inclusive economic growth.
Ahmed Attout, Director of the Financial Sector Development Department at the African Development Bank, highlighted the long-term benefits: “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.”
A Transformative Partnership for Economic Growth
The African Development Bank and Standard Bank’s collaboration demonstrates the power of partnerships in addressing financial challenges faced by businesses in Africa. By facilitating access to capital and trade finance, this initiative contributes to economic development and job creation across the continent.
Kenny Fihla reiterated the importance of this initiative, stating: “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.”
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