The African Development Bank Group and Standard Bank Group have signed a new agreement to improve funding for small and medium-sized micro-companies and expand trade across Africa.
The agreement included investment in social bonds of R3.6 billion and a risk of US$200 million to South Africa’s Standard Bank Limited, according to the statement.
The initiative is designed to strengthen standard bank credit capabilities and ensure greater access to SMME’s financial resources, a key factor in South Africa’s economic growth and job creation.
Investments in social bonds will promote integrated economic development, particularly for SMMEs with sales of less than 300 million and a loan scale of less than 40 million.
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Kenny Fihla, assistant managing director of SBSA’s Standard Banking Group, said the groundbreaking partnership will strengthen its ability to support SMMES, the backbone of the South African economy.
For approximately 3.2 million small businesses, which account for 60% of employment, funding guarantees are extremely important. This initiative addresses our commitment to a sustainable financial framework and financial integration.
In addition to social bonds, the $200 million RPA improves trade funding across Africa, focusing on low-income and transitional countries. The agreement allows local banks to increase their loans by bridging risk, trade financing disparities and promoting intra-Africa trade.
Leila Mokagem, general director of the Southern African Development Bank, said the collaboration is a key milestone in our long-term partnership and evidence of a joint commitment to helping African SMMEs grow and improve trade financing.
With expanded financial inclusion and trade opportunities, businesses can promote economic transformation and regional integration.
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The Standard Banking Group continues to be a strategic partner in the joint vision for the economic development of the continent.
According to the declaration, the initiative corresponds to the African Development Bank’s 10-year strategy (2024 2033), prioritizing industrialization, regional integration and improving quality of life in Africa. It also supports the standard bank’s sustainable financial framework and strengthens the commitment of both institutions to promote green and integration growth.
