G
African Development Bank Lends US$1 Billion to Women in Africa

African Development Bank Lends US$1 Billion to Women in Africa

By African Development Bank
Published February 26, 2023

African Development Bank Lends US$1 Billion to Women in AfricaAfrican Development Bank has lent US$1 Billion to women entrepreneurs across Africa through its Affirmative Finance Action for Women in Africa (AFAWA) project that was launched during the first Feed Africa conference (Dakar 1 Africa Food Summit) in the Senegalese capital, Dakar, in 2015.

RELATED: Financial Institution Empowers Women-Led Businesses

Beth Dunford, the Bank’s Vice President for Agriculture, Human and Social Development, said: “I am incredibly proud of AFAWA’s financing achievement. AFAWA’s benchmark reminds us that when we invest to grow Africa’s food systems, we must also invest in Africa’s women agripreneurs.”

Women run the majority of Africa’s agricultural sector small and medium-sized enterprises (SMEs), yet they face significant barriers to accessing finance. Across the continent, African women entrepreneurs face an estimated $42 billion gender financing gap compared to men.

In the last two years, the Bank, through AFAWA, has multiplied the volume of investments toward women-owned small and medium enterprises sevenfold.

RELATED: Reimagining Youth Skills Development for Africa’s Future

“By the end of December 2022, AFAWA-approved lending to women-led small and medium sized enterprises reached $1.051 billion. Of that, $135 million targets women in the agriculture sector,” said Malado Kaba, Director of the Bank’s Gender, Women and Civil Society Department. “AFAWA’s approved lending reaches across 27 countries, and through 56 financial institutions. Already 4,115 women business owners have benefited from AFAWA financing instruments. This is just the beginning,” she added.

Already, financial barriers to African women ‘agripreneurs’ growing their businesses, are being addressed through AFAWA investment. AFAWA is working to boost the professional and financial capacities of over 200 women cooperatives in the staple crop food sector in Cote d’Ivoire. This includes training and access to a digital platform connecting women producers to buyers of agricultural products like wholesalers, retailers and consumers across Cote d’Ivoire.

Furthermore, AFAWA is working with Ecobank on the ‘Financing Climate Resilient Agricultural Practices in Ghana’ project. The project mobilized US$20 million from the Green Climate Fund, and US$5 million from Ecobank Ghana as co-financing, to fill the gap for working capital to farmers. The AFAWA project aims to provide financing and technical support to 400 women-led, farmer-based associations and women-owned small and medium enterprises, to foster their agriculture productivity and strengthen their climate resilience practices.

RELATED: Africa’s Business Heroes Competition Announces Winners

To accelerate progress toward unlocking US$5 billion in lending for women by 2026, AFAWA has established a Guarantee Mechanism which de-risks the women’s market and increases the ability of financial institutions to lend to women business owners.

AFAWA also launched the Women Entrepreneurship Enablers programme, which provides up to US$250,000 for women’s business associations, incubators, accelerators, women-led cooperatives, and civil society organizations. The program increases women SMEs readiness to access credit and scale their businesses. The program inducted its first cohort of 10 Enablers in July 2022, who are expected to apply skills acquired in the Enablers program to reach more than 15,000 women-led micro and small enterprises. The second call for proposals to the program drew more than 1,200 applicants. The second cohort will be announced later this year.

“In 2023, we will continue to work closely with our partners to accelerate their ability to lend to women-led micro and small enterprises. Ensuring that the enabling environment is inclusive to enhance women’s ability to access financing will be critical. Thus, we will work closely with policymakers to ensure that the right reforms are in place to accelerate women-led small and medium enterprises’ financial access,” said Kaba.