AfDB unlocks US$2bn loans for women SMEs

HARARE – The African Development Bank (AfDB) through its ’Affirmative Finance Action for Women in Africa (AFAWA) initiative has partnered with the African Guarantee Fund to unlock between US$1.3 billion and US$2 billion in loans for the continent’s women-owned Small to Medium Enterprises.

AfDB said the move signals the launch of AFAWA’s Guarantee for Growth (G4G) programme, which seeks to make available up to US$3 billion in financing for women entrepreneurs through de-risking and technical assistance measures.

“The AfDB’s Affirmative Finance Action for Women in Africa (AFAWA) programme has agreed a partnership with the African Guarantee Fund (AGF) to unlock US$1.3 to US$2 billion in loans to women-owned small and medium-sized enterprises in Africa, by working with financial institutions to enhance their ability to lend to women,” said the regional financial institution.

Already, financial institutions in countries such as Cameroon, Democratic Republic of Congo, Kenya, Rwanda, Tanzania and Uganda have signed on to the programme.

As the implementing partner of AFAWA’s G4G programme, the bank said it was already observing an increased appetite from banks for the above 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 cognisant 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,” AfDB quoted African Guarantee Fund group chief executive officer Jules Ngankam as saying.

G4G, 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.

AfDB director of financial service sector development Stefan Nalletambly said the signing of the AFAWA Guarantee for Growth programme with AGF is a critical milestone for the bank to successfully deploy on-the-ground financing instruments better suited to addressing financing and training needs of women-owned SMEs in Africa for the growth and development of their businesses.