The African Development Bank Group, African Guarantee Fund and the South African Financial Sector Gather to Address the $5 billion access to finance Gap Faced by Women Entrepreneurs in South Africa

Publication Date: 15/10/2024

Johannesburg, South Africa – 15 October 2024 – The African Development Bank Group (“the Bank”) and the African Guarantee Fund (AGF), in collaboration with the Banking Association South Africa (BASA), officially launched the Affirmative Action for Women in Africa (AFAWA) Finance Series today in Sandton. The AFAWA Finance Series promotes an inclusive financial ecosystem andpresents financial mechanisms to unlock substantial financing for women-owned and women-led businesses, thus creating a pathway towards sustainable and long-term growth of women-led and women-owned Small and Medium Enterprises in South Africa.

The three-day pioneering event taking place in South Africa will host a wide array of participants, including top executives from commercial banks, SME banks, and microfinance institutions, alongside   other international organizations such as the International Finance Corporation and the World Bank.

It builds on successful events held in Tanzania, the Democratic Republic of Congo, Ghana, Angola, Nigeria, Kenya, and Togo, which have already cumulatively attracted more than 2,000 participants within the financial ecosystem.

The AFAWA Finance Series supports AFAWA’s ambitious goal to unlock $5 billion by 2026 to support 30,000 women-led and women-owned Small and Medium Enterprises which are critical drivers of economic growth, job creation and social development across Africa. Through AFAWA, the African Development Bank has so far approved $1.8 billion and disbursed $1 billion to the benefit of more than 18,000 women entrepreneurs, channelled through 172 financial institutions in 43 African countries. “According to the SME Finance Forum,  women entrepreneurs in South Africa face a $5 billion financial gap, largely because they are wrongly perceived as risky by financial institutions. Our goal is to build data-driven business case that proves women are bankable. In addition, we want to transform the financial landscape for women by offering financial instruments like guarantees and lines of credit coupled with gender sensitive financial training to reassure financial institutions investing in women. Events like the AFAWA Finance Series are critical because they bring together all key players to show that financing women is not right thing to do – it’s a smart economic decision,” shares Melissa Basque-Roux, AFAWA Coordinator at the African Development Bank Group. “We also demonstrate our commitment to support every step of the way.”

Through the AFAWA Guarantee for Growth (G4G) program, implemented by AGF, the AFAWA initiative aims to offer guarantees and technical assistance to financial institutions, helping them adopt gender-sensitive practices and enhancing their capacity to meet the unique needs of women entrepreneurs.

“Women-led and owned businesses in Africa continue to face systemic barriers in accessing finance, often due to discriminatory policies and practices within the financial ecosystem. Through the Guarantee for Growth (G4G) program, AFAWA seeks to not only increase banks’ appetite to finance women SMEs but also to equip them with the knowledge, tools, and incentives to be gender-sensitive in a profitable and sustainable manner,” said Jules Ngankam, Group CEO of the AGF.

BASA Chairperson, Mary Vilakazi added, “At BASA, meaningful and sustainable transformation is key to our contribution towards mitigating social and structural inequalities in our economy.  This partnership with the AfDB and AGF is exciting in that is presents a sustainable way to increase and deepen financing to women owned SMEs.  Local and global research has proven the efficacy in funding women owned business not only in their ability to repay their loans but also in the societal and poverty alleviation ripple effects of financially independent women in business.”

The initiative will involve a series of conferences, training programs, and engagement activities to equip financial institutions with the knowledge and tools to better serve women entrepreneurs.

The conference will focus on three critical outcomes to accelerate financial inclusion for women in Africa, including:

1. Introducing AFAWA G4G program to South Africa as a global initiative that encourages the private sector to invest in women’s empowerment. By de-risking lenders’ portfolios through guarantees, the program showcases how financial institutions can increase their capacity to meet the financial and non-financial needs of women-led SMEs.
2. Equipping financial institutions with Gender-Smart Practices, providing participants with a deeper understanding of what it means to be a gender-sensitive financial institution. Through specialized training sessions, the conference will provide actionable steps on how banks and financial institutions can create inclusive business models that address the needs of women entrepreneurs in a profitable and sustainable way.
3. Offering an in-depth exploration of the opportunities available to women SMEs in accessing finance. Participants will discuss best practices and case studies to enhance the bankability of women-led businesses, empowering them to expand and grow in a competitive global market.

AFAWA Finance Series will engage both financial and public sectors to increase capital access for women entrepreneurs, allowing them to contribute fully to Africa’s economic growth and prosperity.

Ends

Media enquiries:

Nelisa Ngqulana, Dalberg Media, Nelisa.ngqulana@dalberg.com or on +27 73817 8017

AGF Media Contact:

Diana Aluga, diana.aluga@agf.africa

BASA Media contact:

Sihle Nkatsha, Brunswick, snkatsha@brunswick.co.za , Tel: +27 (0) 71 492 8868

Note to Editors:

About the African Development Bank: The African Development Bank Group is Africa’s premier development finance institution. It comprises three distinct entities: the African Development Bank (AfDB), the African Development Fund (ADF) and the Nigeria Trust Fund (NTF). On the ground in 41 African countries with an external office in Japan, the Bank contributes to the economic development and the social progress of its 54 regional member states. For more information: www.afdb.org

About the African Guarantee Fund:  African Guarantee Fund (AGF) is a specialized guarantee provider whose mission is to facilitate economic development and poverty reduction in Africa. To achieve this, AGF increases access to finance for Small and Medium-sized Enterprises (SMEs) across key economic sectors through an array of guarantee products and capacity development assistance. Since inception, AGF has unlocked more than USD 4.3 billion in SME financing, through partnerships with 250 partner financial institutions across 43 African countries.  AGF is rated AA- by Fitch Ratings. For more information www.agf.africa

About the Banking Association of South Africa: The Banking Association South Africa (BASA) advances the interests of the industry with its regulators, legislators and stakeholders, to make banking sustainable, profitable and better able contribute to the social and economic development and transformation of the country. As the national association of domestic and international banks operating in South Africa, BASA:

• Advocates the views of the banks on legislation, regulation, and social and economic issues that affect the industry. BASA canvasses its members through committees and work groups.
• Facilitates the sustainable transformation of the banking industry.
• Promotes inclusive economic growth by working with legislators, regulators, as well as other business associations and stakeholders, to establish a stable, conducive policy and business environment.
• Helps find sustainable solutions to the challenges of poverty, unemployment and inequality by mobilising the skills and resources of the industry.
• Hosts the Southern African Development Community Banking Association (SADC BA), which works with regulators to strengthen the integrity and efficiency of banking services in the region.

About AFAWA: The Affirmative Finance Action for Women in Africa (AFAWA) is an African Development Bank’s initiative contributing to bridge the $49 billion access to finance gap for women in Africa. AFAWA aims to unlock $5 billion in financing for women-owned and women-led small and medium enterprises by 2026. The initiative is supported by the African Development Bank’s partners and donors: the Women’s Entrepreneurs Finance Initiative (We-Fi), G-7 participating countries Canada, France, Germany and Italy as well as the Netherlands and Sweden. Through AFAWA, the African Development Bank has approved $1.8 billion of investment to the benefit of more than 18,000 women entrepreneurs in 43 countries, channeled through 172 financial institutions.”