The African Development Bank has launched a financial programme to support female entrepreneurs secure loans for their businesses.
The Affirmative Finance Action for Women in Africa (AFAWA) programme has agreed a partnership with the African Guarantee Fund (AGF) to secure $1.3 to 2 billion in loans for women who own small and medium-sized enterprises(SMEs) in Africa.
Several financial institutions, including Cameroon, Democratic Republic of Congo, Kenya, Rwanda, Tanzania and Uganda are signing on to the programme.
Jules Ngankam, African Guarantee Fund’s Group CEO, said: “As the implementing partner of AFAWA’s Guarantee for Growth programme, we are already observing an interest from banks for this innovative product that seeks to support women entrepreneurs.
"We have recently signed agreements with leading banks on the continent who are keen to increase their women SMEs portfolio.
“AGF has always been cognizant of the importance of supporting women SMEs to enable them fully play their role as drivers of economic growth. We are glad the momentum is increasing and that banks are now willing to take on this particular business segment,” Ngankam added.
Guarantee for Growth, which receives support from the G7 countries, as well as the Netherlands and Sweden, has three pillars: boosting access to finance, providing technical assistance to financial institutions and women business owners; and improving the enabling environment for women’s SMEs.
Stefan Nalletamby, the Bank’s Director of Financial Sector Development said that signing 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.
The Guarantee for Growth is also expected to reach an average of 18,000 female entrepreneurs and create 80,000 direct jobs.
African women face a $42 billion financing gap, which AFAWA aims to bridge. This is tied to a lack of access to collateral in the form of land and property as well as a gap in knowledge, mentorship, and networks to grow their businesses, which are typically in the informal sector.