The African Development Bank has approved a $310 million financing package for MSMEs in South Africa, with a primary focus on women-led businesses and agribusiness. The funding, provided through FirstRand Bank and FNB, includes gender-focused concessional credit facilities designed to expand access to affordable finance. The initiative aims to foster private sector growth, support smallholder farmers, and promote inclusive economic development.
The Board of Directors of the African Development Bank Group (www.AfDB.org) has approved a $310 million financing package for FirstRand Bank, one of Africa’s largest financial institutions. This support will significantly increase access to finance for micro, small and medium enterprises (MSMEs), with a particular focus on women-led businesses and agribusinesses in South Africa.
FirstRand Bank is a wholly owned subsidiary of FirstRand Group. This comprehensive financing package demonstrates the African Development Bank’s continued support for private sector-led growth and confidence in FNB, FirstRand’s leading commercial banking franchise, to support South Africa’s socio-economic transformation and inclusive growth, particularly through empowering women entrepreneurs and agribusinesses across the country.
This package consists of three strategic elements. 200 million dollar facility for on-lending to MSMEs in various sectors. A $100 million gender-focused financing facility dedicated to women-led and women-owned MSMEs. There is also a $10 million concessional loan facility from the Agri-Food SME Promotion Financing Mechanism for women-owned agricultural SMEs.
“This approval underscores the African Development Bank’s dedication to strengthening South Africa’s private sector and promoting inclusive economic growth,” said Kennedy Mbekeani, African Development Bank Director for Southern Africa. “By channeling these resources through FirstRand, and in particular its commercial banking franchise, FNB, we are working with trusted partners with a wide range of influence to ensure that MSMEs, particularly women-led businesses, have access to the capital they need to grow, create jobs and contribute to South Africa’s economic development.”
A distinctive feature of this recognition is its strong focus on gender. More than a third of the total financial package, or $110 million, is explicitly allocated to women MSMEs. This intentional gender approach is consistent with AfDB’s Affirmative Financial Action for Women in Africa (AFAWA) and Agriculture, Food, Small and Medium Enterprises Catalytic Financing Mechanism (ACFM) efforts, and demonstrates the Bank’s commitment to closing the gender financing gap in Africa.
This concessional funding is designed to significantly increase access to affordable financing on favorable terms for women-owned small and medium-sized enterprises operating in South Africa’s agricultural sector. Although most smallholder farmers in South Africa are still excluded from bank financing, they constitute a significant proportion of the agricultural population.
The financial package will be complemented by technical assistance and performance-based incentives from the African Development Bank’s ACFM and AFAWA initiatives. The technical assistance package aims to increase the bankability of small and medium-sized enterprises led or managed by women. Support the agricultural services of FNB (FirstRand’s commercial banking franchise). Consider alternative credit scoring.
“The approval of this financing package marks an important milestone and uplift in this impactful partnership between the African Development Bank and FirstRand. It demonstrates the shared commitment of both institutions to drive inclusive economic growth and foster the empowerment of South Africa’s credit-starved business community by purposefully channeling credit to women entrepreneurs and smallholder farmers,” said African Development Bank Financial Sector Development Director Ahmed Atout.
“MSMEs are a major contributor to South Africa’s economic growth, supporting job creation and uplifting local communities. FirstRand’s commercial banking arm, FNB, has a strong track record of providing capacity to women-owned businesses and small and medium-sized enterprises in the agricultural sector, which in turn supports the development of local communities,” said FirstRand Group Finance Director Bhulesh Singh.
This operation is in line with the African Development Bank’s Four Cardinal Points development priorities. It also supports the Bank’s 10-year strategy (2024-2033), which focuses on inclusive growth, private sector development, and gender equality.
