AfDB’s AFAWA funding hits $1bn milestone
January 31, 2023292 views0 comments
By Olivia Nnorom & Habeeb Adamu
The African Development Bank’s Affirmative Finance Action for Women in Africa (AFAWA) initiative has reached a landmark $1 billion in approved funding designated for lending to African women entrepreneurs, to bridge the $42 billion financing gap facing women in Africa.
This milestone was disclosed in a press release by the African Development Bank group after it held its AFAWA meeting in Abidjan, Ivory Coast on January 31st, 2023.
“I am incredibly proud of AFAWA’s financing achievement. AFAWA’s benchmark reminds us that when we invest to grow Africa’s food systems, we must also invest in Africa’s women agripreneurs.” Beth Dunford, the Bank’s Vice President for Agriculture, Human and Social Development said.
Dunford noted that despite the significant contribution women make in Africa’s agricultural sector, including small and medium-sized enterprises (SMEs), they face significant barriers to accessing finance, stressing that African women entrepreneurs face an estimated $42 billion gender financing gap compared to men, across the continent.
However, Dunford claimed that the AfDB, through AFAWA, has multiplied the volume of investments toward women-owned small and medium enterprises sevenfold.
According to Malado Kaba, director of the Bank’s gender, women and civil society department AFAWA-approved lending to women-led small and medium sized enterprises reached $1.051 billion by the end of December 2022, with $135 million targeted to women in the agriculture sector.
“AFAWA’s approved lending reaches across 27 countries, and through 56 financial institutions. Already 4,115 women business owners have benefited from AFAWA financing instruments. This is just the beginning,” Kaba said.
The statement emphasised that the AFAWA investment is continuously addressing financial barriers to African women ‘agripreneurs’ growing their businesses. It also noted that the programme is working to boost the professional and financial capacities of over 200 women cooperatives in the staple crop food sector in Cote d’Ivoire which includes training and access to a digital platform connecting women producers to buyers of agricultural products like wholesalers, retailers and consumers across Cote d’Ivoire.
Furthermore, the pan-African investment initiative is currently collaborating with Ecobank on the “Financing Climate Resilient Agricultural Practices in Ghana” project. A project which mobilized $20 million from the Green Climate Fund, and $5 million from Ecobank Ghana as co-financing, to fill the gap for working capital to farmers.
Also, the project aims to provide financing and technical support to 400 women-led, farmer-based associations and women-owned small and medium enterprises, to foster their agriculture productivity and strengthen their climate resilience practices.
To further establish its commitment towards bridging the financial gender gap in Africa, and accelerate progress toward unlocking $5 billion in lending for women by 2026, AFAWA has said it has established a guarantee mechanism which de-risks the women’s market and increases the ability of financial institutions to lend to women business owners.
“In 2023, we will continue to work closely with our partners to accelerate their ability to lend to women-led micro and small enterprises. Ensuring that the enabling environment is inclusive to enhance women’s ability to access financing will be critical. Thus, we will work closely with policymakers to ensure that the right reforms are in place to accelerate women-led small and medium enterprises’ financial access,” Kaba assured.
AFAWA was launched in 2015 in Dakar,Senegal during the first Feed Africa conference.