The African Development Bank’s Affirmative Action Initiative for Women in Africa (AFAWA) has reached $1 billion in approved funding for lending to African women entrepreneurs.
This is another milestone for the bank following last week’s historic meeting to address the growing challenges of food security in Africa. The Dakar 2nd Africa Food Summit was jointly hosted by the Bank and the Government of Senegal with the presence of 34 heads of state and government, more than 70 ministers, representatives of farmers from the private sector and development partners.
AFAWA was launched in 2015 in Dakar at the first Africa Food Conference (Dakar 1 Africa Food Summit).
“I am extremely proud of Afava’s financial achievements,” said Dr. Beth Dunford, the Bank’s Vice President of Agriculture, Human and Social Development. Afava’s benchmark reminds us that when we invest in growing Africa’s food systems, we must also invest in African women farmers.”
Women run the majority of small and medium-sized enterprises (SMEs) in Africa’s agricultural sector, but face significant barriers to access to finance. African women entrepreneurs across the continent face an estimated $42 billion gender funding gap compared to men.
In the last two years, through Afava, the bank has increased the volume of investments towards women-owned small and medium enterprises sevenfold.
By the end of December 2022, Afava’s approved loans to women-led SMEs reached $1.051 billion. Of this amount, $135 million is targeted for women in the agricultural sector, said Melado Kaba, director of the bank’s gender, women and civil society department. Afava’s approved loans reach 27 countries and through 56 financial institutions. So far, 4115 women business owners have benefited from Afava’s financial tools. This is just the beginning,” he added.
Currently, financial barriers for African women “farmers” to grow their businesses are being removed through AFAWA’s investment. Afava is working to strengthen the professional and financial capacities of more than 200 women’s cooperatives in the staple food sector in Côte d’Ivoire. This includes training and access to a digital platform that connects female producers to buyers of agricultural products such as wholesalers, retailers and consumers across Côte d’Ivoire.
In addition, AFAWA is collaborating with Ecobank on the project “Financing Climate Resilient Agricultural Practices in Ghana”. The project mobilized $20 million from the Green Climate Fund and $5 million from Ghana’s Ecobank as co-financing to bridge the working capital gap of farmers. The AFAWA project aims to provide financing and technical support to 400 women-led associations, farmers, and women-owned small and medium-sized enterprises, in order to strengthen agricultural productivity and enhance their climate resilience practices.
To accelerate progress towards $5 billion in lending to women by 2026, Afava has created a guarantee mechanism that de-risks the women’s market and increases the ability of financial institutions to lend to women entrepreneurs.
Afava also launched the Women’s Entrepreneurship Enablers Program, which provides up to $250,000 to women’s business associations, incubators, accelerators, women-led cooperatives and civil society organizations. This program increases the readiness of small and medium-sized women to access credit and expand their businesses. The program announced its first cohort of 10 enablers (link is external) in July 2022, who are expected to apply the skills gained in the enablers program to reach more than 15,000 women-led small and micro enterprises. The second call for proposals attracted more than 1,200 applicants. The second group will be announced later this year.
In 2023, we will continue to work closely with our partners to accelerate their ability to lend to small and micro-enterprises led by women. It will be very important to ensure that there is an enabling environment for increasing women’s ability to access financial resources. Therefore, we will work closely with policymakers to ensure that appropriate reforms are made to accelerate access to finance for women-led SMEs.”