African Women-Led Businesses to Receive $5 Billion Funding From AFDB Through The AFAWA Initiative by 2026
The African Development Bank (AFDB) in collaboration with the African Guarantee Fund (AGF) has announced plans to provide $5 billion in funding capital for African women business owners by 2026, through the Affirmative Action for Women in Africa (AFAWA) initiative.
This announcement was made by Lamin Barrow, the Director General for African Development Bank Nigeria Country Department, at the opening ceremony of the fifth AFAWA Finance Series recently held in Lagos at the Landmark event center.
Barrow said that the AFAWA finance series seeks to increase African women’s access to finance in the continent, by closing the $42 billion financing gap for women-led small and medium enterprises.
In his words,
“Our goal is to mobilize $5 billion in financing for African women-led businesses by 2026. Since we launched AFAWA a little over two years ago, the initiative has approved $ 1.2 billion for on-lending to women-led enterprises in 32 countries across Africa.
“This conference will be followed by a 2-day training that will enable banks to introspect on their product and service offerings through a gender smart lens and therefore better address the needs of women entrepreneurs”.
Barrow added that AFAWA is changing the narrative that investing in women-led businesses is a risky venture, noting that women are reported to repay 99 percent of their loans. He therefore urged stakeholders, private sectors, and financial institutions to give finance leverage to women.
AFAWA is an initiative launched by the African Development Bank to address the gender financing gap in Africa and support women’s empowerment. AFAWA recognizes that women-owned businesses play a crucial role in the economic development of Africa.
In Nigeria, reports reveal that there is a $21 billion gap in financing for women-owned SMEs, as access to finance has continued to be the biggest challenge faced.
Through this initiative, the AFDB seeks to derisk lending to get more money in the hands of women-owned SMEs.
It is predicted that women in Nigeria have the capacity to grow the nation’s GDP by 1.25 percentage points annually. With the right support, they have the potential to accelerate the country’s progress towards achieving its economic development goals.
Therefore, encouraging and supporting women-owned SMEs is a step toward encouraging diversity and inclusion in Africa’s business sector, and is crucial to achieving a more inclusive and equitable business environment on the continent.
