The African Development Bank (AfDB), the African Guarantee Fund (AGF) and the Banking Association South Africa launched the Affirmative Action for Women in Africa (Afawa) Finance Series during a conference, in Johannesburg, on October 15. 

The three-day Afawa Finance Series aims to promote an inclusive financial ecosystem and presents 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, medium-sized and microenterprises (SMME) in South Africa.

The Afawa Finance Series supports Afawa’s goal to unlock $5-billion by 2026 to support 30 000 women-led and women-owned SMMEs, which are critical drivers of economic growth, job creation and social development across Africa.

Through Afawa, the AfDB 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.

Through the Afawa Guarantee for Growth (G4G) programme, 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.

Speaking at the launch, AfDB director-general for Southern Africa Leila Mokaddem noted that, in South Africa, female-owned SMMEs represented 50% of all businesses employing over 55% of the workforce and contributed significantly to the country’s GDP.

She pointed out, however, that nearly half of these businesses remained financially excluded, with a financing gap of about R100-billion.

She added that challenges, such as insufficient collateral, limited credit information and cultural factors, hindered the potential of women entrepreneurs, positing that financial institutions often struggled to meet the unique needs of this segment, resulting in inadequate solutions.

“These challenges are not just statistics, they are dreams deferred.”

To help bridge the gender financing gap, Mokaddem noted that the AfDB had partnered with financial services provider Absa Group in South Africa to implement gender-focused financial solutions.

The collaboration includes a financial package totalling R2.71-billion.

This includes a social bond listed on the Johannesburg Stock Exchange that aims to provide affordable home loans for 3 600 female-led households.

The financial package also includes a sustainability-linked loan designed for SMMEs, women- and youth-owned enterprises, targeting 6 000 entrepreneurs in the next four years.

Mokaddem explained that this was further supported by technical assistance aimed at delivering advisory services and business development support, strengthening access capacity to provide tailored financial solutions for underserved youth- and women-owned SMMEs.

CONFERENCE FOCUS
The initiative will involve a series of conferences, training programmes 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.

This includes introducing the Afawa G4G programme to South Africa as a global initiative that encourages the private sector to invest in women’s empowerment. By derisking lenders’ portfolios through guarantees, the programme showcases how financial institutions can increase their capacity to meet the financial and non-financial needs of women-led SMMEs.

The conference also focusses on 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 specialised 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.

The conference also focusses on offering an in-depth exploration of the opportunities available to women SMMEs 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.

The Afawa Finance Series will engage both the financial industry and the public sector to increase capital access for women entrepreneurs, allowing them to contribute fully to Africa’s economic growth and prosperity.

“If we ensure that women have equal access to finance, we are unlocking potential for millions of jobs, fostering more inclusive, resilient economies . . . the banking sector has a vital role to play in creating a more inclusive financial system.

“We have the capacities, the resources and the obligation to ensure that women entrepreneurs are not left behind,” said Basa chairperson and FirstRand Bank CEO Mary Vilakazi.