In South Africa and across developing markets, MSMEs face a financing shortfall equivalent to nearly 19% of GDP, representing some $5.7 trillion in unmet need globally. This is why targeted support, like AfDB’s $310 million financing for FirstRand Bank earmarked for MSMEs and women-led businesses, is so critical:
The African Development Bank (AfDB) has approved a $310 million financing package for FirstRand Bank to increase lending to micro, small, and medium-sized enterprises (MSMEs) in South Africa.
A total of $110 million is reserved specifically for women-owned MSMEs. This support is important because women entrepreneurs in South Africa face a persistent financing gap. Studies from institutions such as the IFC and AfDB show that women-led businesses receive significantly less credit despite their strong role in job creation and local economic growth.
The package includes three parts: a $200 million credit line for MSMEs across sectors, a $100 million facility dedicated to women-led businesses, and a $10 million concessional credit line focused on women-owned agribusinesses. Agriculture remains one of the hardest sectors for women to access finance, even though many smallholder farmers are women and remain underserved by commercial banks.
AfDB noted that this funding aims to support private-sector development, expand access to affordable credit, and promote inclusive economic growth. Technical assistance and performance-based incentives will accompany the financing to strengthen the capacity of women-owned businesses, improve agricultural banking services, and support alternative credit-scoring models.
Both AfDB and FirstRand highlighted that the initiative will help address long-standing credit shortages for MSMEs, especially women entrepreneurs and smallholder farmers, who play a key role in employment and community development across South Africa.
In South Africa and other developing markets, MSMEs face a financing shortfall nearing in value one-fifth share of GDP, which is about $5.7 trillion in unmet need globally. Women-led firms are disproportionately affected: though they make up roughly 23% of all MSMEs, they account for 34% of that financing gap, notes World Bank.
In South Africa alone, approximately $6 billion in funding is missing for women-owned microenterprises, around 46% of micro, small, and medium enterprises. The new financing programme aligns with AfDB’s priorities on inclusive growth, gender equality, and private-sector support, providing women entrepreneurs with much-needed capital to grow, create jobs, and drive inclusive economic development.
