AfDB President, Akinwumi Adesina
By Michael Eboh
African Development Bank Group (AfDB), yesterday, said it has approved a new Gender Equality Trust Fund (GETF), that would unlock up to $2 billion in credit, in the first instance and further mobilise $5 billion in the long run, for women-empowered businesses in Africa.
In a statement in Abuja, the AfDB explained that the GETF, which was funded by donors, would support the delivery and scale-up of the Bank’s Affirmative Finance Action for Women in Africa (AFAWA) programme and promote gender transformative lending and non-lending operations.
According to the bank, the GETF, which is the first thematic fund on gender in its history, would be established for an initial period of 10 years and was aimed at pushing forward gender equality and women’s empowerment across the continent.
It said, “The Africa Guarantee Fund (AGF) has been chosen as the first implementing partner to facilitate access to finance for women-owned small and medium-sized enterprises (SMEs).
“AGF is a pan-African entity that provides financial institutions with guarantees and other financial products to support SMEs in Africa. AGF has a network spread out over 42 African countries and 150-plus financial institutions, which AFAWA will leverage. This first transaction is expected to unlock up to $2 billion in credit for women-empowered businesses across the continent.”
The bank explained that AFAWA is its flagship pan-African initiative which aims to bridge the $42 billion financing gap facing women in Africa, adding that through AFAWA, the Bank is spearheading a major push to unlock women’s entrepreneurial capacity and economic participation for maximum development impact.
According to the AfDB, anchor investors in the GETF are the governments of France, the Netherlands and the United Kingdom, adding that apart from the G7 donors and the Netherlands, other countries are showing strong interest in contributing to the initiative, including Rwanda and Sweden.
The AfDB said it would continue to mobilize resources in order to unlock $5 billion worth of financing for women-empowered businesses in Africa, especially as AFAWA is also an implementing partner of the Women Entrepreneurship Finance (We-Fi) Initiative.
Commenting on the initiative, President of the AfDB, Akinwumi Adesina, said, “It’s a great day for us as a bank. It is a great day for the continent and the women of Africa as this facility provides innovative ways to tackle the access to finance challenges for African women business owners.”
Also speaking, Vanessa Moungar, Bank Director, Gender, Women and Civil Society, described the approval as “the largest effort ever to bridge the gap in access to finance for women in Africa’s history.”
She stated that the fund’s resources and the Risk-Sharing Mechanism, which the Board of Directors of the Bank recently approved, would prioritize women’s economic empowerment and high-impact women’s initiatives.
Moungar said the partnership with AGF is a starting point for mobilizing other financial institutions and increasing access to finance for women entrepreneurs on the continent.
The bank explained that the recently approved Risk-Sharing Mechanism – an innovative financial instrument to de-risk women-empowered businesses, would enhance their profile with banks and support them to grow and thrive as entrepreneurs.