Johannesburg - Standard Bank Group [JSE:SBK] is now financing small and medium enterprises (SMEs), tapping into a lucrative segment that was previously ignored by mainstream lenders but is increasingly on the agenda for most African governments. There is a $140bn to $170bn financing gap for SMEs on the continent, according to research by the International Finance Corporation and McKinsey. With about 40 million SMEs in the 17 countries that it operates in, Standard is aiming to extend R1bn of loans by the end 2012 from R250m currently. The financing product - known as Ouick Loan - lends between $300 and $30 000, which it expects to be repaid within three, six or 12 months, said Amrei Botha, head of SME banking for Standard. Interest rates range between 1.2% to 6% per month, which Botha says is a third or half of what competitors charge. “The future in Africa definitely lies in the small and medium enterprise sector,” she told Reuters. “What we had underestimated is the huge demand.” Standard has rolled out the product in four countries: Kenya, Ghana, Nigeria and Tanzania, and charges on average between 1.2% to 6% interest per month. The vast majority of Africans are not employees and earn their income from small businesses or farming. Many do not keep proper records or have collateral, which causes obstacles when they need loans.