This article is part of a collaborative series with the African Development Bank, commemorating its sixtieth anniversary.
To learn more about the Bank’s history and initiatives across the continent, please visit our dedicated portal.
Gender lens investing has now been incorporated into the operations of the African Development Bank, the largest development finance institution in Africa. This integration was revealed 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 in Rabat, Morocco.
“Nothing can be achieved at the Bank without understanding how projects impact women, both directly and indirectly,” he emphasized during the event.
The Affirmative Finance Action for Women in Africa is an initiative set up by the Bank with support from the Women’s Entrepreneurs Finance Initiative (We Fi), G7 countries including Canada, France, Germany, and Italy, along with the Netherlands and Sweden, aiming to mobilize $5 billion in financing for women-led and owned businesses to tackle the $49 billion funding gap faced by women in Africa. Adesina was inspired to launch this initiative after frequently meeting women traders on flights between Lagos and Abidjan in his early career.
“When I became president of the Bank, I vowed to ensure these women gain the funding they need to thrive in their businesses,” he reflected.
AFAWA Targeting $5 Billion for Women Entrepreneurs
By the end of November, Adesina announced, “AFAWA has authorized $2.42 billion for women entrepreneurs in Africa.” To date, $1.14 billion has been disbursed to 18,607 women-owned businesses throughout the continent. This progress has been made possible through collaboration with the African Guarantee Fund, which executes the Guarantee for Growth program, in conjunction with 185 financial institutions across 44 African countries. “I am confident that AFAWA is on a path to successfully mobilize $5 billion for women-led and owned enterprises in Africa by 2026,” Adesina noted, adding, “There has never been anything like AFAWA on our continent.”
While women constitute roughly 40% of all micro, small, and medium-sized enterprises in Africa, they face considerable structural challenges in accessing financing. Extensive research by the International Finance Corporation reveals that women receive less than 10% of venture capital funding and merely 5% of private equity investments. Adesina asserted that in spite of these hurdles, women are indeed bankable, and the success of AFAWA stands as proof of this.
AFAWA’s Transformative Impact Shown Through Growth and Expansion
Pauline Otila, the founder of Apiculture Ventures in Kenya, exemplifies AFAWA’s transformative effects. Initially securing $20,000 from an AFAWA-partnered bank, she expanded her beekeeping network from 1,200 to 10,000 farmers. Her company now supports 25,000 beekeepers across 20 counties in Kenya, selling over 20,000 hives, leading to average annual earnings increasing more than sevenfold. Likewise, Ebun Feludu, founder of Kokari Coconuts and Company in Nigeria, has grown her enterprise, established in 2016, that processes coconuts into premium lifestyle, food, and personal care products. Her $40,000 loan backed by AFAWA enabled her to enter the U.S. export market.
Adesuwa Okunbo Rhodes, founder and managing partner of Aruwa Capital Management, recounted her experience running a private equity firm since 2019. She was inspired by research showing that only 2% of venture capital funds go to female entrepreneurs, while studies indicate that female capital allocators are twice as likely to invest in female-led businesses and three times more likely to support female CEOs.
“Thus, I initiated the ambitious journey of establishing my own fund as a solo female general partner. At that time, I was only 29 years old and five months pregnant,” she reminisced.
AfDB President Urges Investors to Support Women-Led Businesses
With initial backing from affluent individuals, primarily women, from Nigeria, the United States, and Europe, Aruwa successfully secured funding from the MasterCard Foundation and FSD Africa. By the end of 2022, the fund concluded its first oversubscribed round, raising over $20 million. They have invested in 10 businesses in Nigeria and Ghana, with about 70% of their portfolio being female-founded and female-led. Currently, they are supporting more than 175,000 direct and indirect jobs through the SMEs they back and are in the process of raising a $50 million fund,” she stated.
The accomplishments of AFAWA and firms such as Aruwa demonstrate the potential of increasing support for women-led enterprises to yield substantial outcomes, leading Adesina to encourage more investors to back these initiatives. “I call upon all investors to join us in this critical mission to uplift women-owned businesses. When women succeed, African economies thrive. Let’s elevate women-led businesses and ensure they are never disregarded again,” he asserted.
