The African Development Bank’s (AfDB) 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 signaled 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,” African Guarantee Fund’s Group CEO, Jules Ngankam said.
“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,” 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.