African Development Bank (AfDB) is joining hands with African Guarantee Fund (AGF) to unlock $1.3 to $2 billion in loans that would benefit women entrepreneurs in Africa through a concerted partnership with financial institutions.
According to the press release on the website of AfDB, “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.”
According to Jules Ngankam, African Guarantee Fund’s Group CEO:
- “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.
- “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.”
According to Stefan Nalletamby, the Bank’s Director of Financial Sector Development
“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.”
According to Esther Dassanou, AFAWA’s Coordinator:
- “There is an urgent need to improve the enabling environment with the right regulations in place, to sustainably de-risk the segment.
- “The Bank will work with regulators to reform the legal and regulatory frameworks affecting women businesses’ access to finance.”
According to Vanessa Moungar, the Bank’s Director for Gender, Women and Civil Society,
- “Donor and private sector-support for the overall AFAWA initiative is helping the Bank set ambitious targets for AFAWA Guarantee for Growth program.
- “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.”
- AFAWA Guarantee for Growth program receives support from the Group of Seven (G7) countries as well as the Netherlands and Sweden
- The target for AFAWA Guarantee for Growth is reach an average of 18,000 women small and medium enterprises and create 80,000 direct jobs
- African women face a $42 billion financing gap, which AFAWA aims to bridge – closely 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.
- African Guarantee Fund is a non-bank financial institution whose objective is to promote economic development, increase employment and reduce poverty in Africa by providing financial institutions with guarantee products and capacity development assistance specifically intended to support SMEs in Africa.
- African Guarantee Fund was founded by the government of Denmark through the Danish International Development Agency (DANIDA), the government of Spain through the Spanish Agency for International Cooperation and Development (AECID) and the African Development Bank (AfDB).
- French Development Agency (AFD), Nordic Development Fund (NDF), Investment Fund for Developing Countries (IFU) and KfW Development Bank (KfW) are key shareholders of African Guarantee Fund.
