On Monday, the African Development Bank Group and Standard Bank Group (SBG) signed a landmark financial agreement aimed at enhancing funding for small, medium, and micro enterprises (SMMEs) and expanding trade across 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 Limited (SBSA), designed to strengthen the bank’s lending capacity and provide greater access to finance for SMMEs, which are vital to economic growth and job creation in South Africa.

The social bond investment focuses on inclusive economic development, particularly for SMMEs with a turnover under R300 million and loan sizes below R40 million. It will support up to 4,000 businesses, helping them scale their operations, create jobs, and contribute to economic resilience.

Kenny Fihla, Deputy CEO of Standard Bank Group and CEO of SBSA, expressed enthusiasm for the partnership, stating: “This landmark partnership enhances our ability to support SMMEs, the backbone of South Africa’s economy. With around 3.2 million SMMEs providing 60% of jobs, ensuring access to finance is essential. This initiative aligns with our Sustainable Finance Framework and our commitment to financial inclusion.”

In addition to the social bond, the $200 million RPA aims to bolster trade finance across Africa, with a particular focus on Low-Income Countries and Transition States. By enabling local banks to increase lending through shared risk, the agreement addresses the trade finance gap and promotes intra-African trade.

Leila Mokaddem, Director General for Southern Africa at the African Development Bank, highlighted the partnership’s broader impact, saying, “This collaboration marks a significant milestone in our long-standing relationship and reflects our shared commitment to supporting SMMEs and enhancing trade finance. Expanding financial inclusion and trade opportunities empowers businesses to drive economic transformation and regional integration.”

This initiative also aligns with the African Development Bank’s Ten-Year Strategy (2024–2033), which prioritises industrialisation, regional integration, and improving quality of life across Africa.