The African Development Bank’s (AfDB) Affirmative Finance Action for Women in Africa (AFAWA) program will unlock up to US$2 billion in loans to women-owned SMEs on the continent.
The African Development Bank’s Affirmative Finance Action for Women in Africa (AFAWA) program has agreed to a partnership with the African Guarantee Fund (AGF) to unlock $1.3 to 2 billion in loans to women-owned Small and Medium-Sized Enterprises(SMEs) in Africa, by working with financial institutions to enhance their ability to lend to women. This marks the launch of AFAWA’s Guarantee for Growth (G4G) program, which aims to make available up to US$3 billion in financing for female entrepreneurs through de-risking and technical assistance via financial institutions.
“There is an urgent need to establish regulatory frameworks and avail financial assistance to address issues affecting women’s growth in business. The bank will work with regulators to reform the legal and regulatory frameworks affecting women businesses’ access to finance.”, said AFAWA co-ordinator, Ms. Esther Dassanou.
Mr Stefan Nalletamby, the AfDB’s director of financial sector development, said banking institutions joining the program would be helping to create a level playing field for the growth of women in business.
“The signing of the AFAWA Guarantee for Growth programme with the African Guarantee Fund is a critical milestone for the bank to successfully deploy on-the-ground financing instruments better suited to addressing the financing and training needs of women-owned small and medium enterprises in Africa for the growth of their businesses,” Mr Nalletamby said.
In 2020, Africa led the Mastercard Index of Women Entrepreneurs; Uganda, Botswana, and Ghana had the highest percentage of female business owners in the world. Despite the many challenges in Africa’s entrepreneurial ecosystem, African women have continued to thrive and contribute significantly to their communities. However, African Development Bank statistics indicate that these women businesspersons face a US$42 billion financing gap annually, which AFAWA aims to bridge. The Guarantee for Growth program is expected to reach an average of 18,000 women in small and medium enterprises and create 80,000 direct jobs.
Already, financial institutions in Cameroon, the Democratic Republic of Congo, Kenya, Rwanda, Tanzania and Uganda have signed onto the AfDB programme.