Businesswomen in Africa with limited access to finance stand to benefit from an agreement signed by the African Development Bank and the International Finance Corporation (IFC) at the bank’s annual meetings in India.
The agreement will drive women’s financial inclusion in Africa by mobilising investment towards specially targeted financial services and aims to increase female participation in the global value chain by promoting better access to value-added markets.
“We want to de-risk the financial system and allow institutions to give loans to women. Together the AfDB and the IFC are showing confidence in women’s bankability,” Akinwumi Adesina, president of the African Development Bank.
According to the World Bank, only 34 percent of adults in sub-Saharan Africa hold bank accounts, 30 percent of which are held by women, compared with 39 percent for men. Although Africa has the highest proportion of female entrepreneurs of any continent in the world, many women still cannot get financial support to grow their ventures in the crucial early years of business. World Bank research also points out that woman are 17 percent less likely than men to borrow from a formal financial institution.
In 2016, the bank launched its Women in Africa (AFAWA) programme at its annual meetings in Lusaka, which provides financial services to help women in business through a select group of financial institutions. According to estimates by the programme, the financing gap for African businesswomen could be up to US$42 billion, some US$15.6 billion of which is lacking for women in agriculture.
India would be an important location for IFC’s local currency lending as a means of including female entrepreneurs. Most female-led businesses – around 32 to 39 percent – exist in local markets within the smallest business segment, and so cannot take on foreign exchange risk.
“Agriculture and women entrepreneurship are two areas of expertise of the IFC and this MoU is a unique opportunity to scale financing for women in agriculture,” Jingdong Hua, IFC’s vice-president.
Source: DevFinance. Read full article here.
25 May, 2017
