African Bank, led by Kennedy Bungane, secures $40.4 million to back SMEs

African Bank Limited, led by South African executive Kennedy Bungane, has raised $40.4 million through its first social bond issuance, a step aimed at expanding access to finance for small- and medium-sized businesses. The offer, which included three- and five-year bonds, drew strong demand with bids of more than R1 billion ($57.3 million) received on the day.

The bonds, which are available in terms of three and five years, represent a significant development in the bank's new Sustainable Finance Framework. Under the framework, African Bank is able to offer green, social, and sustainability-linked bonds for raising funds for initiatives that have quantifiable positive effects on the environment and society.

Building a sustainable banking model

African Bank said the framework aligns with several United Nations Sustainable Development Goals, including financial inclusion, gender equality, and climate action. 

“This framework to raise money for social and environmental initiatives is more than a financial tool; it’s a commitment to responsible banking, inclusive growth, and environmental stewardship,” said Edna Sathekga-Montse, the bank’s group chief transformation and sustainability officer.

She added that African Bank’s approach is designed to address “internal operations, stakeholder relationships, community impact, and environmental sustainability,” emphasizing that all four areas are crucial for long-term growth. 

To ensure accountability, the bank will release annual allocation and impact reports and seek independent verification of its use of proceeds. The framework has also been reviewed by the Johannesburg Stock Exchange and received a Second Party Opinion to confirm its compliance with international best practices.

Bungane’s leadership and expansion drive

Since taking over as group CEO in April 2021, Bungane has pushed African Bank to diversify beyond its retail base. He launched the “Excelerate25” strategy, which set out to make the lender more customer-focused, digitally enabled, and financially sustainable. 

The plan has already helped return the bank to profitability and positioned it for a future listing. Under Bungane’s watch, African Bank has also expanded into new financial sectors. In March, it completed a $28 million acquisition from Grindrod’s GFS Holdings, strengthening its asset base after earlier purchasing Grindrod Bank’s operations. 

By securing a stronger presence in KwaZulu-Natal’s North Coast, the bank is broadening its revenue streams while reinforcing its long-term goal of financial inclusion. “African Bank is not just talking about change,” Sathekga-Montse said. “We want to show how our actions can help individuals and communities pursue their aspirations.”