JOHANNESBURG
A $332 million financing package aimed at expanding access to credit for small and medium-sized enterprises in South Africa is expected to strengthen lending to businesses, including women-owned companies, and support job creation across the country.
The African Development Bank has invested $332 million, or ZAR 5.4 billion, in a capital markets security issued by Standard Bank Group Ltd., Africa’s largest bank by assets, to finance small and medium-sized enterprises across South Africa.
The lender announced the transaction on July 31, alongside a separate $1 million technical assistance grant under its Affirmative Finance Action for Women in Africa program to help address barriers faced by women entrepreneurs.
The grant, funded through the Women Entrepreneurs Finance Initiative, will support digital payment tools that help businesses build verifiable credit histories and provide enterprise and supplier development support to women-led firms.
The security is structured as a Flac instrument, a class of debt introduced by the South African Reserve Bank in January as part of the country’s bank resolution framework.
Issued as a social bond and listed on the Johannesburg Stock Exchange, it is Standard Bank Group’s first Flac instrument on the bourse dedicated to social development objectives.
Kennedy Mbekeani, the African Development Bank’s director general for Southern Africa, said the investment would strengthen Africa’s financial architecture while channeling long-term capital to South Africa’s entrepreneurs and small businesses.
Standard Bank has committed to allocating the entire ZAR 5.4 billion to SMEs, including women-led companies, as it seeks to narrow the financing gap facing small businesses.
South Africa’s roughly 3.2 million SMEs account for about 60% of jobs, according to Standard Bank.
Luvuyo Masinda, chief executive of corporate and investment banking at the lender, said the financing would support businesses that are “a critical driver of economic growth and job creation.”
Bill Blackie, chief executive of business and commercial banking at Standard Bank, said the technical assistance grant would fund initiatives delivering “direct, tangible benefits” to women-led businesses.
The transaction extends a partnership between the African Development Bank and Standard Bank that dates back to 2008.
In November 2024, the development lender approved a ZAR 3.6 billion subordinated debt facility for the banking group and a $200 million risk-participation agreement to support trade finance across Africa.
