What's Happening?
The African Development Bank (AfDB) has invested $332 million in a capital markets security issued by Standard Bank Group Limited to enhance financing for small and medium-sized enterprises (SMEs) in South Africa. This investment aims to improve access
to finance for businesses, including those led by women, and support the country's evolving banking sector. The AfDB's Affirmative Finance Action for Women in Africa (AFAWA) program is also providing a $1 million technical assistance grant to address barriers faced by women entrepreneurs. The investment is structured as a Flac instrument, a new category of debt introduced by the South African Reserve Bank, and is listed as a social bond on the Johannesburg Stock Exchange.
Why It's Important?
This investment is significant as it addresses the persistent gender financing gap within South Africa's small business sector. By supporting SMEs, the AfDB is contributing to job creation and inclusive economic growth. The partnership with Standard Bank Group is expected to build a more resilient banking system and support the SMEs that drive economic development. The investment also reflects the AfDB's commitment to strengthening Africa's financial architecture and directing long-term capital to where it is most needed.
What's Next?
Standard Bank Group has committed to deploying the entire investment towards financing SMEs, including women-led businesses. This initiative is expected to encourage the broader adoption of international best practices in banking across the African continent. The AfDB's ongoing partnership with Standard Bank Group, which began in 2008, continues to support trade finance across the continent, with previous facilities fully utilized to support thousands of SMEs.
