African businesswomen will benefit from an agreement between the African Development Bank (AfDB) and the International Finance Corporation (IFC) to promote investments beneficial to them based on the joint belief in the value and potential of businesses run by women to the development of Africa’s private sector.
“Women pay back loans. They are bankable, but the banking system does not lend to them. We want to change this; we want to de-risk the financial system and allow institutions to give loans to women,”said Akinwumi Adesina, President, AfDB.
While the Africa Gender Equality Index shows that female entrepreneurship on the continent is the highest globally, the AfDB estimates that there is a $42 billion financial gap for African businesswomen, $15.6 billion lacking for women in agriculture.
IFC Vice-President and Treasurer, Jingdong Hua noted that agriculture and women entrepreneurship are areas of expertise of the IFC and added that the MoU with AfDB is a unique opportunity to scale financing for women in agriculture.
AfDB’s Affirmative Finance Action for Women in Africa (AFAWA) program aims at providing available, accessible and affordable financial services to African women in business through selected financial institutions.
IFC connects women-owned businesses with partners and financial institutions on its Banking on Women Program as well as engages value chains of local, regional and global corporates to strengthen and broaden access to finance, training and markets for businesswomen.
AFAWA and Banking on Women will work together to mobilize $3 billion over 10 years, leveraging financial inclusion instruments, capacity development, training, mentoring, information and knowledge-sharing to empower female entrepreneurs.
They will introduce strong and smart policies; appropriate rules; clear legislation and regulations; and other reforms in the financial sector to create an enabling environment for women entrepreneurs to thrive in.
They will also strengthen women’s capacity to participate in the global value chain by increasing their access to higher added value markets, calling for preferential access through for instance quotas, targets and tax exemptions.
African businesswomen will in addition be equipped with the necessary skills and knowledge to be successful on the continent.
The memorandum of understanding to promote investment that benefit women in Africa between the AfDB and IFC was signed on the sidelines of the AfDB Annual Meetings currently ongoing in Ahmedabad, India.