Abidjan, October 28, 2021 – The Association of African Development Finance Institutions (AADFI), in partnership with the Affirmative Finance Action for Women in Africa (AFAWA), held a webinar on “Mainstreaming Gender Equity in Development Finance” on October 28, 2021. Over 70 senior executives, head of units, managers, and decision-makers from development finance institutions across Africa gathered to discuss the business case for gender-lens investing, showcase successful financial institutions that have developed programs for women SMEs, and explore potential opportunities to work with development finance institutions on increasing their activities for women enterprises.
The opening remarks were delivered by Mr. Thabo Thamane, Chairman of AADFI and CEO of the Citizen Entrepreneurial Development Agency (CEDA), Botswana, and Mr. Lamin Drammeh, Manager for Trade Development Division at the Financial Sector Development Department; while Mr. Basil Jones, Gender Program and Policy Coordinator at the African Development Bank, gave the closing remarks at the end of the session.
Mr. Thabo Thamane commendedthe need for the program and agreed that women should be given more voices in development finance operations and across the value chain of financing and employment, compared to what presently exists. He called on national DFIs to be part of the process in moving the agenda for Gender Equity forward, sighting the success of his institution, CEDA, which has 57% of its businesses portfolio owned by females. In addition, he acknowledged that women-owned businesses pay better than men-owned businesses. He informed that 56% of his organization’s workforce is female, of which 41% is in the senior management level and 50% is in the executive committee.
Mr. Lamin Drammeh reiterated that the African Development Bank acknowledged that women are the backbone of African economies. However, it was widely recognized that investing in women represented one of the biggest opportunities for pursuing the agenda of Africa’s inclusive economic growth. Women face the biggest challenges in accessing funding, which is estimated at a $42 billion financing gap. The Bank believes that supporting women entrepreneurs through technical assistance, capacity-building programs, as well as catalytic private investments are crucial measures to foster inclusive economic growth in Africa. Therefore, AFAWA has been developed as a solution to address the financing gap for women SMEs on the continent, while enhancing their capacity as well as that of financial institutions to lend profitably and sustainably.
Mr. Basil Jones, in his closing remarks,highlighted that the workshop has made it clear that addressing the financing gap for women entrepreneurs in Africa is not only central to women’s economic empowerment but also the entire African economy. The Bank remains ready to support pragmatic approaches that are profitable, and sustainably address women’s financial needs through AFAWA.
An overview of the status of women in Africa and the best practice of development and non-development institutions was presented by Tascha Terblanche, Manager, from Genesis Analytics based on a baseline study on the status of women entrepreneurs and their access to finance in Africa. The report showed that in accessing financing to run and grow their businesses, women were more likely to save up for themselves than to apply for financing from banks. Parts of the reasons for this are unfavorable lending conditions with high-interest rates and short repayment periods, low self-perception of creditworthiness, and low financial literacy, risk aversion, and cultural factor. Besides, the study showed that banks have a low appetite to lend to women SMEs, as they perceive them to be riskier customers and more expensive to serve.
The second part of the webinar emphasized the AFAWA theory of change, which focuses on the AFAWA solutions to the gender financing gap. Mrs. Marieme Ester Dassanou, Manager of AFAWA, highlighted that the AFAWA aimed to unlock $5billion in financing for women by 2026 through two channels: The AFAWA Guarantee for Growth Program, and Leveraging Traditional Financial Instruments of the bank. To achieve that goal, AFAWA relies on three pillars:
- Pillar 1: AFAWA Access to Finance, through which AFAWA develops innovative financial mechanisms to increase lending to women-owned businesses. This helps to close the gender gap as well as leverages the African Development Bank’s traditional financial instruments.
- Pillar 2: AFAWA Technical Assistance, through which AFAWAprovides advisory services to financial institutions to enhance their understanding of the women’s business market and to develop tailored financial and non-financial services to better address their needs. AFAWA also strengthens the capacity of women entrepreneurs through training to boost business productivity and growth.
- Pillar 3: AFAWA Enabling Environment, through whichAFAWA engages with African governments, regional economic communities, and other key stakeholders to support legal, policy, and regulatory reforms. The goal is to strike down structural barriers that impede the access and growth of women SMEs.
The AADFI hopes to sustain the engagement with AFAWA to ensure that its member DFIs take advantage of this flagship program in scaling up their gender equity interventions.
The Association of African Development Finance Institutions (AADFI) is an umbrella organization for development finance institutions in Africa, created under the auspices of the African Development Bank in 1975. The objectives of the Association are to stimulate cooperation for the promotion and financing of sustainable development in Africa and to encourage the process of economic integration in the African region. AADFI has over 80-member development finance institutions across the region.
The Affirmative Finance Action for Women in Africa (AFAWA) is a pan-African initiative whose goal is to bridge the $42 billion financing gap that women entrepreneurs face in Africa. Through the AFAWA Guarantee for Growth program, the African Development Bank aims to unlock up to $3 billion in financing for women-owned small- and medium-sized enterprises by de-risking them and enhancing financial institutions’ appetite to lend to women.