On the fifth day of the African Development Bank’s 2016 Annual Meetings, which are being held in Lusaka, Zambia, from May 23 to 27, around 10 African Finance Ministers – in their capacity as Governors of the AfDB Group – met with members of the regional Gender Equality Community of Practice to discuss funding issues in relation to gender equality.
The discussions were moderated by the President of the AfDB, Akinwumi Adesina.
The AfDB’s Special Envoy on Gender, Geraldine Fraser-Moleketi, attended the meeting. She highlighted the clear influence that this African Gender Equality Community of Practice exercised in relation to the Bank’s regional member countries, and called for it to meet more often – and not only at the Annual Meetings – to share experiences and evaluate the actions taken.
Conducting regular evaluations would advance the cause of women in the business world and increase support from Ministries of Finance in African countries and the AfDB.
Women entrepreneurs: A cautious approach by the banks
It is often not easy to be a female entrepreneur in Africa: 47% of them reportedly face major obstacles to access the funding they need to develop their businesses, compared with 44% of their male counterparts. Just 16 to 20% of women entrepreneurs in Sub-Saharan Africa say that they have secured long-term funding from formal financial institutions. The commercial banks are overly cautious and very often refuse to give loans to women entrepreneurs, whom they see as risky or even high-risk customers. The shortage of funding for women entrepreneurs is thought to be around US $42 billion, according to estimates from the World Bank and the International Finance Corporation (IFC).
The AFAWA (Affirmative Finance Action for Women in Africa) initiative is a new program launched by the office of the AfDB’s Special Envoy on Gender. Its aim is to support women in fulfilling their economic potential by helping them to access funding. To achieve this, the AFAWA intends to mobilise some US $3 billion to support financial systems, by adopting a partnership-based approach. The AfDB is set to contribute around US $150 million and additional resources will need to be mobilised for technical assistance and national and regional operations.
Among other solutions and measures to be implemented, the Ministers of Finance of the African Gender Equality Community of Practice discussed the introduction of affirmative action and capacity building for women; creating loan guarantee funds and social development funds specialising in microfinance; taking steps with the commercial banks to ensure facilities were granted to women, by opening dedicated credit lines for funding SMEs run by women entrepreneurs; budgeting for a gender component in the respective Finance Acts of the Bank’s regional member countries; granting title deeds to land to women in rural areas; and increasing access to business development services such as business incubators.