DailySun
This article is part of a collaborative series with the African Development Bank, marking its sixtieth anniversary.
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The African Development Bank, which is Africa’s largest development finance institution, has incorporated gender lens investing into its operations. This announcement was made by Dr. Akinwumi Adesina, the Bank’s president and chairman, during the Affirmative Finance Action for Women in Africa (AFAWA) Day event at the Africa Investment Forum held in Rabat, Morocco.
“Success at the Bank cannot be achieved without considering the impact of projects on women, whether directly or indirectly,” he emphasized during the event.
AFAWA is a program crafted by the Bank, supported by the Women’s Entrepreneurs Finance Initiative (We Fi) and G7 nations including Canada, France, Germany, Italy, as well as the Netherlands and Sweden, with an aim to secure $5 billion in funding for women-led and owned businesses to tackle the $49 billion financing gap faced by women in Africa. Adesina was inspired to develop this initiative after regularly meeting women traders on flights between Lagos and Abidjan early in his career.
“Upon assuming the role of president of the bank, I pledged to ensure that these women obtain the financing they need to thrive in their businesses,” he said.
AFAWA Aims to Mobilize $5 Billion for Women Entrepreneurs
By the end of November, Adesina reported, “AFAWA has approved $2.42 billion for women entrepreneurs in Africa.” To date, $1.14 billion has already reached 18,607 women-owned businesses across the continent. This achievement is a result of collaboration with the African Guarantee Fund, which enacts the Guarantee for Growth program, alongside 185 financial institutions across 44 African countries. “I am optimistic that AFAWA will meet its target of mobilizing $5 billion for women-led and owned enterprises in Africa by 2026,” Adesina noted, asserting, “AFAWA is unprecedented in our continent’s history.”
While women constitute about 40% of all micro, small, and medium-sized enterprises on the continent, they face considerable structural barriers in accessing financing. High-level research by the International Finance Corporation indicates that women receive less than 10% of venture capital funding and a mere 5% of private equity investments. Adesina emphasized that, despite these obstacles, women are indeed bankable, and the success of AFAWA is a testament to this fact.
AFAWA’s Transformative Impact Evidenced by Growth and Expansion
Pauline Otila, founder of Apiculture Ventures in Kenya, exemplifies AFAWA’s transformative impact. Initially securing $20,000 from an AFAWA-partnered bank, she scaled her beekeeping network from 1,200 to 10,000 farmers. Her enterprise now supports 25,000 beekeepers across 20 counties in Kenya, selling over 20,000 hives, which has led to an impressive increase in average annual earnings—more than sevenfold. Similarly, Ebun Feludu, founder of Kokari Coconuts and Company in Nigeria, has expanded her business, which processes coconuts into premium lifestyle, food, and personal care products since its establishment in 2016. Her $40,000 AFAWA-backed loan allowed her to enter the U.S. export market.
Adesuwa Okunbo Rhodes, founder and managing partner of Aruwa Capital Management, also shared her experience in running a private equity firm since 2019. She was motivated by the statistic that a mere 2% of venture capital funds are directed towards female entrepreneurs, while studies reveal that female capital allocators are twice as likely to invest in female-led ventures and three times more likely to back female CEOs.
“Thus, I undertook the courageous task of establishing my own fund as a solo female general partner. At that time, I was just 29 and five months pregnant,” she recalled.
AfDB President Urges Investors to Support Women-Led Businesses
With initial backing from affluent individuals, predominantly women, in Nigeria, the United States, and Europe, Aruwa successfully garnered funding from the MasterCard Foundation and FSD Africa. By the close of 2022, the fund completed its first oversubscribed round, raising over $20 million. They have invested in 10 businesses in Nigeria and Ghana, with approximately 70% of their portfolio being female-founded and female-led. Currently, they are supporting over 175,000 direct and indirect jobs through the SMEs they finance. They are in the process of raising a $50 million fund,” she mentioned.
The accomplishments of AFAWA and firms like Aruwa showcase the transformative potential of increased support for women-led businesses, prompting Adesina to call for more investors to participate in this initiative. “I urge all investors to join us in this vital effort to uplift women-owned businesses. When women succeed, African economies prosper. Let’s elevate women businesses and ensure they are never overlooked again,” he proclaimed.
