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Key Points
- Standard Bank and AfDB launched a $397 million fund to expand credit access for African small businesses, driving job creation and economic resilience.
- The facility includes a R3.6 billion social bond and a $200 million risk-sharing deal to support firms with annual revenue under R300 million ($16.3 million).
- Under Tshabalala, Standard Bank continues regional expansion, backing major deals like Barloworld’s $1.23 billion acquisition and boosting African trade finance.
Standard Bank Group, a Johannesburg-based financial services giant led by Sim Tshabalala, and the African Development Bank Group (AfDB) have set up a $397 million (R7.3 billion) facility to boost small, medium, and micro enterprises (SMMEs) across the continent. The move is set to widen credit access, stimulate job creation, and bolster economic resilience.
The agreement, formalized by both institutions, includes a R3.6 billion ($195.8 million) social bond dedicated to businesses generating less than R300 million ($16.3 million) in annual revenue. A $200 million Risk Participation Agreement, managed through Standard Bank’s South African unit, will further mitigate lending risks. Loan sizes are capped at R40 million ($2.17 million) to ensure accessibility for smaller firms.
“This financing will support up to 4,000 businesses, helping them scale, create jobs, and strengthen economic resilience,” said Kenny Fihla, Standard Bank Group Deputy CEO. “With 3.2 million SMMEs contributing 60 percent of South Africa’s jobs, access to capital remains critical.”
Boosting growth amid South Africa’s economic challenges
South Africa’s economy has struggled with sub-1 percent growth over the past decade, largely due to limited access to finance for small businesses. The government is targeting a 3 percent expansion by 2025, implementing reforms to improve the ease of doing business.
The AfDB noted that the financing partnership would expand trade finance, mitigate lending risks, and accelerate intra-African trade, which remains among the world’s lowest at under 20 percent.
“This partnership reflects our commitment to financial inclusion and economic transformation,” said Leila Mokaddem, AfDB’s Director General for Southern Africa. “By boosting access to trade finance, we are fostering regional integration and industrialization, key priorities under the AfDB’s Ten-Year Strategy.”
The initiative aligns with Standard Bank’s Sustainable Finance Framework, reinforcing the lender’s role in mobilizing capital for economic development across Africa.
Standard Bank’s expanding influence under Tshabalala
Under CEO Sim Tshabalala, Standard Bank has strengthened its position as Africa’s top corporate financier, with a market capitalization of $19.6 billion on the Johannesburg Stock Exchange (JSE). The bank operates in 19 sub-Saharan African markets, including Kenya, Tanzania, Uganda, Ethiopia, and South Sudan, as it expands its regional presence.
Earlier this month, the lender committed R17 billion ($913.2 million) to back the R22.8 billion ($1.23 billion) acquisition of South African industrial giant Barloworld, underscoring its role in financing major corporate deals. It also partnered with the International Finance Corporation (IFC) to expand local currency lending, helping businesses across Africa access much-needed liquidity.
Now, as Africa’s financial landscape shifts, Standard Bank’s latest collaboration with the African Development Bank (AfDB) reflects a broader effort to support small businesses—the backbone of job creation and economic stability across the continent.
