Agri-SMEs Access to Finance, South Africa — FirstRand Bank

Project Description

The project supports FirstRand Bank Limited (FRB) in expanding access to long-term finance for micro, small and medium enterprises in South Africa, with a focus on women-owned businesses and smaller agricultural enterprises.

The financing package combines African Development Bank resources with concessional financing from ACFM. The Bank's facilities will support FRB's broader MSME portfolio, including women-owned enterprises across various sectors, while ACFM financing will be ring-fenced for women-owned small enterprises in agriculture.

The project addresses persistent financing constraints faced by smaller agricultural businesses, particularly women entrepreneurs and emerging farmers, who are often underserved due to limited collateral, thin credit histories, restricted market access, and higher risk perceptions among commercial lenders.

Since South Africa's definition of small enterprises aligns with ACFM's agri-SME definition, ACFM funding will target small, women-owned enterprises — a segment FRB has historically avoided due to perceived risk — while the AfDB facility will cover micro, small, and medium agri-enterprises.

Through this operation, FRB will offer longer-term, more affordable financing, develop tailored agricultural lending products, and strengthen its capacity to reach smaller enterprises at the base of the agricultural finance market. FRB has also committed USD 15 million of its own capital, with concessional benefits passed directly to small, women-owned agricultural enterprises.

Project Objectives

• Access to Finance for small women-led agri enterprises: ACFM’s support will help FRB develop a portfolio for small, women-owned agri-enterprises, improving their access to finance and income while expanding South Africa’s agricultural sector. In parallel, c.30% (USD 100 million) of AfDB’s loans will be towards women owned businesses (across sectors); 15% (USD 45 million) of AfDB’s facility will be geared towards agriculture specifically agri-SMEs and about 2% or USD 5.4 million will be focused on ACFM’s Women led small enterprises in agriculture. In addition, FRB has also committed USD 15 million of their own resources towards women led small enterprises in agriculture.
• Creating Markets: While FRB’s initial focus leaned toward more established, investment-ready agribusinesses with clearer pathways to scale, ACFM demonstrated that catalytic, blended capital could be structured to reach much smaller and more vulnerable enterprises.
• Concessionality to the ACFM target beneficiaries: All concessional benefits will be passed to small, women-owned agri-enterprises through more affordable loans. With ACFM support, FRB will reduce interest rates for this segment by 1%, improving credit affordability, supporting growth and job creation. Due diligence confirmed that this is the minimum rate required to unlock additional funding from FRB’s own resources in a sustainable manner.

Expected Outcomes

• 100 small women owned agri SMEs, to receive financing from FRB.
• 220 agri-enterprises, gain increase access to long term financing.
• c.1.5x, of private sector funds to be mobilized towards the ACFM target beneficiaries.
• c.400 jobs to be created, 54% youth and 30% women.
• Growth of the ACFM target beneficiaries, FRB has pledged to continue supporting this segment, signaling a long-term commitment to inclusive growth.