The G20-B20 moment Africa’s smes cannot afford to miss
Opinion Piece by Bill Blackie, CEO of Standard Bank Business and Commercial Banking
In September, Johannesburg hosted the Global SME Finance Forum 2025, a sideline event of South Africa’s G20-B20 Presidency. The conversations on these platforms have been centred on how the cost of capital for African SMEs remains too high. Unless financing becomes more affordable, accessible and better matched to entrepreneurs’ realities, the continent’s growth story will not achieve its full potential.
A major factor in the high cost of capital is how global risk models overestimate risk in Africa due to limited data availability compared to developed economies. Increasing proximity by having rating agencies and investors engage more directly with African businesses can lead to fairer risk assessments. This improved understanding can reduce risk premiums and thus lower capital costs.
Africa’s small and medium-sized enterprises (SMEs) face additional challenges that result in a higher cost of capital, that inhibit the continent’s economic growth potential. This issue extends beyond high interest rates to include hidden frictions such as compliance delays, currency volatility, and fragmented trade systems that increase the effective cost of doing business. Addressing these invisible costs alongside lending rates is crucial in enabling African entrepreneurs to compete globally on fairer terms.
Operating across 54 countries with diverse currencies, legal systems, and regulations adds complexity and risk for SMEs. Regional harmonisation efforts, such as regulatory alignment and tariff reductions in East Africa along with technological innovation and access have facilitated easier cross-border trade. Expanding such integration and technology driven access continent-wide would enhance SME competitiveness and efficiency. Standard Bank provides support through its Africa-China Import Proposition and by offering finance and trade solutions to help businesses overcome trade barriers and realise the continent's ambitions. This includes trade corridor solutions, support for intra-African trade, and facilitating access to global markets to drive economic growth and job creation.
Access to broader supply chains and export markets is vital for SME growth. Export readiness programs and trade corridors help entrepreneurs scale by connecting them to the broader global and regional markets, particularly in Asia and Africa. Standard Bank’s strategic partnership with the Industrial and Commercial Bank of China puts us in a unique position to deal in Chinese Renminbi (RMB), enabling businesses to make and receive RMB payments for trade settlements.
Family-owned and medium-sized businesses are the backbone of growth in developed economies. They, however, remain underserved in Africa. Family businesses face liquidity and risk management challenges. Providing tools to hedge against currency devaluation and volatility along with the right support and advise to help them on their journey of achieving the proper corporate structures are critical to protect these enterprises from external shocks.
Another key challenge faced by SME’s remains a “one size fits all” approach in accessing capital. Finance must be tailored to the SME lifecycle with the appropriate capital facilities being available dependent on the stage of evolution of each entity. Too often SME’s struggle to scale up due to a mismatch between the requirements of the founders/business owners and the capital providers.
Start-ups require flexible working capital; Scaling firms need longer-term funding for expansion while Export-ready businesses benefit from risk mitigation tools like guarantees and foreign exchange solutions. Without such tailored finance, SMEs remain vulnerable to shocks and struggle to build sustainable businesses.
Solutions such as BizFlex, a first-of-its-kind loan that is designed to adapt to the business’ financial circumstances and match loan repayments with revenue generation through its unique ‘pay as you earn’ repayment structure, enable businesses to access funding appropriate to their cashflow and needs.
Supporting SMEs must go beyond financial products to include capacity development. Many exceptional business owners and entrepreneurs are required to have a broad set of expertise that do not relate to the core requirements of their businesses to scale and grow their business. This leads to them being stretched too thin and losing focus on the one thing that had made them successful, a razor-sharp focus on scaling their business. The appropriate capacity and support to deal with these additional requirements in an efficient manner may well be a significant turning point in the growth of several SMEs. Standard Bank views specialised, product and industry specific value-added solutions and advice that allows business owners to focus on the core of their business as a critical enabler to growing and scaling SME’s.
Women-owned SMEs, despite strong performance, remain underfunded. True inclusion requires mentoring, procurement integration, and policies to dismantle entry barriers. When women entrepreneurs succeed, positive impacts multiply across families and communities.
Sustainability is now essential, with over R450 billion targeted for sustainable finance mobilisation between 2022 and 2028. The recently launched Sustainability Academy equips SMEs with skills to measure environmental footprints, improve resource efficiency, and access green finance. Early integration of sustainability practices positions SMEs for future market access and growth.
Africa’s domestic capital pools, especially in South Africa, represent an underutilised resource. Banks, insurers, and pension funds could play a larger role in funding infrastructure and enterprise growth, thereby reducing overall capital costs. Mobilising these resources alongside fairer risk ratings and regional integration can create favourable conditions for SME development.
African entrepreneurs are ambitious and innovative but require affordable, appropriately structured capital, predictable regulatory environments, and ecosystems that reduce friction. The G20-B20 Presidency offers a platform to translate global commitments into impactful reforms. Lowering both visible and hidden costs, aligning finance with business lifecycles, and investing in capabilities, inclusion, and sustainability will transform SME statistics into tangible growth and foster a more inclusive, resilient Africa.