The African Development Bank (AfDB) has invested US$332 million (ZAR5.4 billion) in a social bond issued by Standard Bank Group to expand financing for small and medium-sized enterprises (SMEs) across South Africa, while also supporting the country's evolving banking framework.

The investment is complemented by a US$1 million (ZAR16 million) technical assistance grant through the AfDB's Affirmative Finance Action for Women in Africa (AFAWA) programme, funded by the Women Entrepreneurs Finance Initiative (We-Fi). The grant will help address barriers faced by women entrepreneurs by providing digital payment tools to build verifiable credit histories and enterprise development support for women-led SMEs.

Together, the financing and technical assistance are intended to strengthen Standard Bank's capacity to increase lending to SMEs, including women-owned businesses.

The facility is structured as a Flac instrument, a new class of debt introduced by the South African Reserve Bank in January 2026 as part of the country's phased implementation of a bank resolution framework.

The security has been issued as a social bond listed on the Johannesburg Stock Exchange (JSE), making it Standard Bank Group's first JSE-listed Flac instrument dedicated to financing projects with social objectives.

“This investment reflects the African Development Bank's commitment to strengthening Africa's financial architecture while directing long-term capital to where it is needed most—South Africa's small businesses and entrepreneurs,” said Kennedy Mbekeani, the Bank's Director General for Southern Africa and Country Manager for South Africa. “By partnering with Standard Bank Group, we are simultaneously helping to build a more resilient banking system and supporting the SMEs that drive jobs and inclusive growth.”

Standard Bank has committed to allocating the full ZAR5.4 billion to SME financing, with a particular focus on women-led businesses to help address the persistent gender financing gap in South Africa's small business sector.

“We are delighted to close another landmark transaction with the AfDB, following the successful 2024 transactions,” said Luvuyo Masinda, Chief Executive of Corporate and Investment Banking at Standard Bank Group.

“This social Flac issuance will further enable the group to deliver on our purpose – ‘Africa is our home; we drive her growth’. SMEs are a critical driver of economic growth and job creation. They are the backbone of South Africa’s economy, with approximately 3.2 million SMEs accounting for 60% of jobs, so ensuring these businesses have support and access to finance is imperative to our collective growth aspirations.”

Bill Blackie, Chief Executive of Business and Commercial Banking at Standard Bank, said the additional funding would strengthen the bank's ability to support smaller businesses while expanding targeted initiatives for women entrepreneurs.

“We see first-hand the critical role that SMEs play in driving prosperity and job creation,” Blackie said. “This deal, together with our partnership with the AfDB, strengthens our ability to back the businesses that underpin inclusive economic growth. We are especially excited about the technical assistance grant, which will allow us to fund key initiatives that deliver direct, tangible benefits to women-led SMEs.”

The African Development Bank said the transaction is also intended to promote broader adoption of international banking standards across the continent.

“This transaction is designed to be catalytic, encouraging the broader adoption of international best practice in banking across the African continent,” said Ahmed Attout, Director of the Financial Sector Development Department at the African Development Bank.

The latest investment builds on a long-standing partnership between the AfDB and Standard Bank that dates back to 2008. It follows the Bank's approval in November 2024 of a ZAR3.6 billion subordinated debt facility for Standard Bank Group and a US$200 million risk participation agreement with The Standard Bank of South Africa to support trade finance across Africa.

According to Standard Bank, the 2024 facility had been fully deployed by December 2025, supporting 5,425 SMEs—exceeding its original target of 4,000 businesses—with financing directed to companies operating in agriculture, retail, wholesale trade and manufacturing.