African Development Bank’s AFAWA Reaches $1 Billion Investment Milestone in Loans to Women Entrepreneurs in Africa | African Development Bank

The African Development Bank’s Affirmative Finance Action for Women in Africa (AFAWA) initiative has reached a milestone of $1 billion in approved funding for loans to African women entrepreneurs.

This is another milestone for the bank after a historic summit last week to address the escalating food security challenges in Africa. The Dakar 2 Africa Food Summit, jointly organized by the Bank and the Government of Senegal, was attended by 34 heads of state and government, more than 70 ministers, representatives of private sector farmers and development partners.

AFAWA was launched in 2015 in Dakar at the first Feed Africa conference (Dakar 1 Africa Food Summit).

Dr. Beth Dunford, the Bank’s Vice President for Agriculture, Human and Social Development said, “I am incredibly proud of AFAWA’s funding performance. AFAWA’s benchmark reminds us that when we invest to grow Africa’s food systems, we must also invest in African women agripreneurs.”

Women run the majority of small and medium-sized enterprises (SMEs) in the agricultural sector in Africa, but they face significant barriers to accessing finance. Across the continent, African women entrepreneurs face an estimated $42 billion gender funding gap.

Over the past two years, the Bank, through AFAWA, has increased sevenfold the volume of investment in small and medium-sized enterprises owned by women.

“At the end of December 2022, AFAWA-approved loans to women-led small and medium-sized enterprises totaled $1.051 billion. Of that, $135 million is aimed at women in the agricultural sector,” said Malado Kaba, director of the Bank’s Gender, Women and Society division. “AFAWA’s approved loans reach 27 countries and through 56 financial institutions. Already 4,115 women entrepreneurs have benefited from AFAWA’s financing instruments. This is just the beginning,” she added.

Financial barriers to African female ‘agricultural entrepreneurs’ growing their businesses are already being addressed through AFAWA investments. AFAWA works to strengthen the professional and financial capacities of more than 200 female cooperatives in the basic food sector in Ivory Coast. This includes training and access to a digital platform that connects women producers with buyers of agricultural products, such as wholesalers, retailers and consumers in Ivory Coast.

Furthermore, AFAWA is working 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 Ecobank Ghana as co-financing, to fill the working capital gap for farmers. The AFAWA project aims to provide funding and technical support to 400 women-led farmer associations and women-owned SMEs to promote their agricultural productivity and strengthen their climate resilience practices.

To accelerate progress toward unlocking $5 billion in loans for women by 2026, AFAWA has established a guarantee mechanism that mitigates the risks of the women’s market and increases the ability of financial institutions to provide loans to women entrepreneurs.

AFAWA also launched the Women Entrepreneurship Enablers Program, which provides up to $250,000 to women’s business associations, incubators, accelerators, women-led cooperatives, and community organizations. The program increases the willingness of female SMEs to access credit and scale their businesses. The program launched its first cohort of 10 Enablers in July 2022, who are expected to apply the skills acquired in the Enablers Program to reach more than 15,000 women-led micro and small businesses. The second call for proposals for the program attracted more than 1,200 applicants. The second cohort will be announced later this year.

“In 2023, we will continue to work closely with our partners to accelerate their ability to provide loans to women-led micro and small businesses. Ensuring that the enabling environment is inclusive will be critical to increasing women’s ability to access finance. Therefore, we will work closely with policymakers to ensure that the right reforms are implemented to accelerate the financial access of women-led small and medium-sized enterprises,” said Kaba.

Watch the videos on the Bank’s website to learn more about some of the women who participate in AFAWA’s programs.