ABIDJAN, Ivory Coast, February 12, 2021/ -- The African Development Bank’s (www.AfDB.org)
Affirmative Finance Action for Women in Africa (AFAWA) program has
agreed a partnership with the African Guarantee Fund (AGF) to unlock
$1.3 to 2 billion in loans to women-owned Small and Medium Sized
Enterprises (SMEs) in Africa, 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 $3 billion in financing for women
entrepreneurs through de-risking and technical assistance measures.
Already, financial institutions in Cameroon, Democratic Republic of
Congo, Kenya, Rwanda, Tanzania and Uganda are signing on 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: boosting access
to finance, providing technical assistance to financial institutions and
women business owners; and 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.
"There is an urgent need to improve the
enabling environment with the right regulations in place, to sustainably
de-risk the segment,” said Esther Dassanou, AFAWA’s Coordinator. “The
Bank will work with regulators to reform the legal and regulatory
frameworks affecting women businesses' access to finance," she added.
The
Guarantee for Growth is also expected to reach an average of 18,000
women small and medium enterprises and create 80,000 direct jobs,
Dassanou said.
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 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. "The entire Bank ecosystem
will be at play - inviting more financial institutions to sign into the
program - ensuring engagement, implementation, and ownership at the
market and policy levels," she added.
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