AfDB, AGF to unlock $2bn loans for women entrepreneurs

The African Development Bank’s Affirmative Finance Action for Women in Africa programme has agreed a partnership with the African Guarantee Fund to unlock $1.3 billion to $2 billion in loans for women-owned Small and Medium-scale Enterprises in Africa, by working with financial institutions to enhance their ability to lend to women.

The AfDB said in a statement on Friday that the move signalled the launch of AFAWA’s Guarantee for Growth programme, which aims to make available up to $3 billion in financing for women entrepreneurs through de-risking and technical assistance measures.

Financial institutions in Cameroon, Democratic Republic of Congo, Kenya, Rwanda, Tanzania and Uganda are already signing on to the programme, according to the statement.

“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 AGF’s Group Chief Executive Officer, Jules Ngankam.

“AGF has always been cognisant of the importance of supporting women SMEs to enable them to 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: boosting access to finance, providing technical assistance to financial institutions and women business owners; and improving the enabling environment for women’s SMEs, according to the statement.

“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,” the Director of Financial Sector Development, AfDB, Stefan Nalletamby, said.

“There is an urgent need to improve the enabling environment with the right regulations in place, to sustainably de-risk the segment,” said AFAWA’s Coordinator, Esther Dassanou.

She said the bank would work with regulators to reform the legal and regulatory frameworks affecting women businesses’ access to finance.

She said the Guarantee for Growth was also expected to reach an average of 18,000 women SMEs and create 80,000 direct jobs.