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Home / Topics and Sectors / Initiatives & Partnerships / AFAWA (Affirmative Finance Action for Women in Africa) / Why AFAWA?
- Because women are the backbone of the African economy. The African continent has the highest percentage of women entrepreneurs in the world. According to the Global Entrepreneurship Monitor (GEM) 2016/17 Women’s Report, the female entrepreneurship rate in sub-Saharan Africa is 25.9% of the female adult population, meaning that one in four women starts or manages a business.
- Because women typically reinvest up to 90% of their income in the education, health and nutrition of their family and community - compared to up to 40% for men. This means that investing in women’s businesses can transform societies.
- Because women entrepreneurs face multiple challenges to access finance, with an estimated $42 billion financing gap for African women across business value chains, including $15.6 billion in agriculture alone. The challenges include:
- Finance: lending to women is seen as riskier, so they face prohibitive interest rates. In addition, women often lack traditional collateral and guarantees.
- Capacity: financial institutions lack the capacity to understand and respond appropriately to women entrepreneurs, who also often lack the financial and business acumen to respond to the needs of financial institutions.
- Business environment: in many countries, legal and regulatory frameworks hinder women’s full participation in private sector growth.
AFAWA’s approach challenges the gender gap in access to finance and liberates women’s entrepreneurial capacity in Africa.