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Oliver Kazunga, Senior Business Reporter

THE African Development Bank (AfDB) has approved a new Gender Equality Trust Fund, which seeks to bridge the US$42 billion financing gap facing women on the continent.

The initiative is being supported by donor funding and would go a long way in accelerating the bank’s finance Affirmative Finance Action for Women in Africa (Afawa) programme and foster gender transformative lending and non-lending operations.

“The board of directors of the African Development Bank group have approved a new Gender Equality Trust Fund (GETF) aimed at pushing forward gender equality and women’s empowerment across the continent.

“It is the first thematic fund on gender in the bank group’s history. The fund will be established for an initial period of 10 years,” it said.

Afawa is the bank’s flagship Pan-African initiative which aims to bridge the financing gap facing women in Africa.

Through Afawa, the regional financier is spearheading a major push to unlock women’s entrepreneurial capacity and economic participation for maximum development impact.

Anchor investors in the GETF are the governments of France, the Netherlands and United Kingdom. AfDB president Dr Akinwumi Adesina was quoted as saying this was a milestone for the bank and the continent as this facility provides innovative ways to tackle the access to finance challenges for African women business owners.

The Africa Guarantee Fund (AGF) has been chosen as the first implementing partner to facilitate access to finance for women-owned Small and Medium Enterprises (SMEs).

AGF is a pan-African entity that provides financial institutions with guarantees and other financial products to support SMEs in Africa.

AGF has a network spread out over 42 African countries and 150-plus financial institutions, which Afawa will leverage.

This first transaction is expected to unlock up to US$2 billion in credit for women-empowered businesses across the continent.

AfDB gender, women and civil society director, Vanessa Moungar, described the approval as “the largest effort ever to bridge the gap in access to finance for women in Africa’s history” and said the Fund’s resources and the Risk-Sharing Mechanism would prioritise women’s economic empowerment and high-impact women’s initiatives.

Moungar said the partnership with AGF is a starting point for mobilising other financial institutions and increasing access to finance for women entrepreneurs on the continent.

Apart from the G7 donors and the Netherlands, other countries are showing strong interest in contributing to the initiative, including Rwanda and Sweden.

The banking group will continue to mobilise resources in order to unlock US$5 billion worth of financing for women-empowered businesses in Africa.

Afawa is also an implementing partner of the Women Entrepreneurship Finance (We-Fi) Initiative.

Meanwhile, AfDB board last week approved a Risk-Sharing Mechanism – an innovative financial instrument to de-risk women-empowered businesses, enhance their profile with banks and support them to grow and thrive as entrepreneurs.

– @okazunga