AfDB Approves $310 Million Support for MSMEs in South Africa

• AfDB has approved a $310 million (R5.6 billion) funding package for FirstRand Bank
• The financing will be used to enhance access to credit by MSMEs in South Africa on women-led businesses and agribusinesses

The African Development Bank (AfDB) has approved a loan package of $310 million (R5.6 billion) to FirstRand Bank to enable improved access to financing for micro, small and medium-sized enterprises (MSMEs) in South Africa, particularly women-owned enterprises and agribusinesses.

The announcement, made on Thursday, also shows AfDB's continuing investment in private sector-led growth and confidence that FNB (the bank from FirstRand) will deliver on economic inclusion in the country.

There are three key elements of the funding package a line of credit for MSMEs of $200 million across sectors, gender-centered line of credit of $100 million across women-owned or women-managed MSMEs and concessional loan for $10 million under ACFM for women managed agribusinesses.

Kennedy Mbekeani, AfDB's director general for Southern Africa, noted that the approval demonstrates the Bank's resolve to support private sector development as well as broad-based economic growth.

He stated that working through FirstRand and FNB ensures the funds will reach MSMEs, especially women-owned businesses, to assist in scaling, job creation, and contributing to national development.

More than a third of the financing, $110 million is earmarked for women entrepreneurs. This is aligned with the AfDB's Affirmative Finance Action for Women in Africa and the ACFM programme, aimed at closing the gender financing gap across the continent.

The concessional financing is designed to help increase access to affordable credit for women-led agricultural businesses, which is an area where many smallholder farmers are still excluded from the formal banking sector.

In order to aid access to finance for micro, small and medium enterprises in South Africa, particularly for women-led businesses and agribusinesses, the African Development Bank (AfDB) has approved a Financing Package to FirstRand Bank for $310 million (R5.6 billion).

The AfDB made the announcement on Thursday, demonstrating its ongoing support for the private sector and growth and its confidence in FirstRand's commercial bank, FNB, for inclusive economic development in the country.

The financing package consists of the first a $200 million line of credit for MSMEs in all sectors; second, a $100 million gender-lens line of credit for women-owned or women-led MSMEs; lastly, a $10 million concessional loan for women-led agribusiness as part of the Agri-Food SME Catalytic Financing Mechanism (ACFM)