Johannesburg, South Africa, 8 December 2025 - The United Nations Development Programme (UNDP) in South Africa, the United Nations Capital Development Fund (UNCDF), and partners, including the Development Bank of Southern Africa (DBSA), African Bank, and the Gauteng Enterprise Propeller (GEP), officially launched Township Spark, on the margins of the G20 Social Summit.
Building on the priorities and momentum of South Africa’s G20 Presidency, Township Spark is an innovative blended-finance initiative designed to unlock new capital flows for township-based micro, small, and medium-sized enterprises (MSMEs), particularly youth- and women-led enterprises.
Township Spark is a unique syndicated “club” guarantee structure that blends and leverages the de-risking capabilities of public development finance partners to catalyse commercial capital flows to vital and underserved township markets. Through this facility, the partners aim to address the persistent financial exclusion of township economies, catalysing agile lending solutions, testing alternative credit metrics and generating actionable market data to shape and scale-up in South Africa before replication across the African continent.
South Africa’s township economy contributes an estimated R1 trillion annually and sustains millions of livelihoods through small-scale trading, services, and manufacturing. Yet nearly 80 percent of township businesses remain informal, disconnected from mainstream finance, and unable to start up or scale. This calls for the need for targeted, catalytic interventions that can unlock access to affordable capital, formalise enterprises, and create a pathway for township entrepreneurs to participate meaningfully in the wider economy.
UNDP South Africa Deputy Resident Representative, Dr Gloria Kiondo, emphasised the power of coordinated action. “The launch was a reminder of what’s possible when UN agencies move with purpose, pace, and the ability to convene multisectoral partners,” said Dr Kiondo. “Through collaboration with government, financial institutions and development partners, Township Spark bridges public and private capital to unlock opportunities where they are most needed.”
Building on this message of innovation and partnership, UNCDF highlighted the facility’s role in redefining financing for development. Township Spark is a prototype for the post-Sevilla agenda showing what becomes possible when innovation, blended finance, and true partnership converge to unlock growth where it is most needed. By pooling development finance across national and subnational actors into a syndicated guarantee facility and leveraging a second-tier bank to crowd in private capital, we are expanding the very toolkit available for financing development. This unique structure will enable township entrepreneurs to access affordable, catalytic finance - a key step in achieving inclusive development.
DBSA welcomed the introduction of smarter, evidence-based lending tools. "Township Spark represents precisely the kind of partnership-driven innovation that DBSA supports,” said Palesa Ryan, Head of Social, Health & Education. “Our strategy has long recognised the importance of small-business development, particularly in job creation a key impact measure for the DBSA. By working with UNDP, UNCDF, African Bank and other development partners, we can incorporate smarter credit-risk approaches that reflect the real credit risk inherent in township enterprises and price for them accordingly. By providing the guarantee facility, the cost of borrowing will be reduced and improve the chances of success for entrepreneurs who have historically been overlooked.”
Bringing in the perspective of the commercial banking sector, African Bank Group Chief Transformation & Sustainability Officer, Edna Sathekga-Montse, highlighted both the historical context and the future opportunity unlocked by this facility.
“By participating in this catalytic guarantee facility, African Bank is reaffirming its commitment to reimagining how capital can be used to unlock the country’s most vibrant yet constrained entrepreneurs. This collaboration enables us to play a pivotal role in expanding credit access to MSMEs in township settings, laying the groundwork for sustainable wealth creation, job growth, and a more inclusive economy. In doing so, we honour our legacy while shaping a future where every entrepreneur has the opportunity to ignite their potential.”
Township Spark is a practical demonstration of what modern development financing looks like in action: moving beyond grant-based support toward sophisticated blended-finance mechanisms that mobilise domestic capital for underserved communities. The initiative showcases how the UN system can influence financial architecture, catalyse domestic resources, and support MSMEs with real investment capital, not just advisory services.
As a coordinated partnership among government institutions, global development partners, and domestic financial institutions, Township Spark ensures that policy and finance move in sync. Its multi-tiered risk-sharing structure blends first-loss, junior, and senior guarantees to reduce lending risk, modelling a new way of financing at scale.
With expressions of support already received from the Small Enterprise Development and Finance Agency (SEDFA), Gauteng Enterprise Propeller (GEP) and the South Africa Department of Small Business Development (DSBD), Township Spark will only continue to grow.
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About UNDP
The United Nations Development Programme (UNDP) works in approximately 170 countries and territories to help eradicate poverty, reduce inequalities and exclusion, and strengthen resilience so that countries can sustain long-term progress. As the UN’s development agency, UNDP plays a central role in supporting countries to achieve the Sustainable Development Goals by advancing inclusive growth, strengthening institutions, and promoting sustainable development pathways.
About UNCDF
The United Nations Capital Development Fund (UNCDF) mobilises and catalyses capital for impactful investments in high-risk and underserved markets. By deploying risk-absorbing financial instruments and blended finance solutions, UNCDF helps unlock local investment, create jobs, and foster economic growth. Operating in partnership with UN entities and development partners, UNCDF delivers scalable solutions that bridge the gap between development finance and commercial capital.
About DBSA
The Development Bank of Southern Africa (DBSA) is a development finance institution committed to accelerating inclusive and sustainable development across the continent. By expanding access to development finance, the DBSA supports the delivery of integrated and sustainable infrastructure that drives shared socio-economic growth. Guided by a strategy focused on financial sustainability, strong governance, and measurable development impact, the DBSA identifies infrastructure opportunities, mobilises public and private capital, and supports effective project implementation. Through its programmatic approach of conceptualising, catalysing, and implementing, the DBSA works with governments, the private sector, and development partners to address infrastructure backlogs and advance national policy priorities.
About African Bank
African Bank is a financial partner committed to supporting customers on their journey toward prosperity. Rooted in a legacy of inclusion, the bank provides innovative financial solutions designed to meet the needs and aspirations of diverse communities. Guided by a strong commitment to transparency, African Bank promotes open communication, accountability, and integrity across all interactions. These principles underpin African Bank’s mission to build trust, expand access, and empower individuals and businesses to thrive.