The African Development Bank’s Affirmative Finance Action for Women in Africa (AFAWA) program has agreed to partner with the African Guarantee Fund (AGF), to unlock close to Ksh. 218.8 billion ($2 billion) in loans to women-owned SMEs in Africa. This will be facilitated by working with financial institutions to enhance their ability to lend to women.
The move signals the launch of AFAWA’s Guarantee for Growth (G4G) program, which aims to make available up to Ksh. 328.2 billion ($3 billion) in financing for women entrepreneurs through low-risk and technical assistance measures. Currently, financial institutions in Kenya, Cameroon, Democratic Republic of Congo, Rwanda, Tanzania and Uganda are signing up to the program.
“As the implementing partner of AFAWA’s Guarantee for Growth program, we are already observing an increased appetite 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,” said Jules Ngankam, African Guarantee Fund’s Group CEO.
“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 Group of Seven (G7) countries as well as the Netherlands and Sweden, has three pillars namely
- Boosting access to finance.
- Providing technical assistance to financial institutions and women business owners.
- Improving the enabling environment for women’s SMEs.
“The signing of the AFAWA Guarantee for Growth program 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,” said Stefan Nalletamby, the Bank’s Director of Financial Sector Development.
African women face a multi-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 to knowledge, mentorship, and networks to grow their businesses, which are typically in the informal sector.
“Donor and private sector-support for the overall AFAWA initiative is helping the Bank set ambitious targets for AFAWA Guarantee for Growth program,” said Vanessa Moungar, the Bank’s Director for Gender, Women and Civil Society.