Gender lens investing has been incorporated into the operations of the African Development Bank, the largest development finance institution in Africa. This initiative was announced by Dr. Akinwumi Adesina, the president and chairman of the Bank, during the Affirmative Finance Action for Women in Africa (AFAWA) Day event at the Africa Investment Forum held in Rabat, Morocco.

“Accomplishing anything at the Bank necessitates considering how projects impact women, both directly and indirectly,” he emphasized at the event.

The Affirmative Finance Action for Women in Africa, developed by the Bank with support from the Women’s Entrepreneurs Finance Initiative (We Fi), as well as G7 countries including Canada, France, Germany, Italy, the Netherlands, and Sweden, is aimed at providing $5 billion in funding to women-led and owned businesses, addressing the $49 billion financing shortfall that women in Africa face. Adesina was inspired to create this initiative after frequently meeting women traders during flights between Lagos and Abidjan in the early stages of his career.

“Upon becoming the president of the Bank, I committed to ensuring these women receive the funding required to thrive in their endeavors,” he reflected.

AFAWA Aiming to Mobilise $5 Billion for Women Entrepreneurs

As of the end of November, Adesina reported, “AFAWA has sanctioned $2.42 billion for women entrepreneurs in Africa.” To date, $1.14 billion has been disbursed to 18,607 women-owned businesses across the continent. This achievement is a result of collaboration with the African Guarantee Fund, which implements the Guarantee for Growth program, along with 185 financial institutions across 44 African nations. “I am confident that AFAWA is on course to reach its ambition of mobilizing $5 billion for women-led and owned enterprises in Africa by 2026,” Adesina stated, adding, “There’s never been anything like AFAWA in our continent.”

While women make up around 40% of all micro, small, and medium-sized enterprises in Africa, they face considerable structural barriers in obtaining financing. Research from the International Finance Corporation shows that women receive less than 10% of venture capital and only 5% of private equity investments. Adesina asserted that notwithstanding these challenges, women are indeed bankable, with AFAWA’s success exemplifying this fact.

AFAWA’s Transformative Impact Evidenced by Growth and Expansion

Pauline Otila, the founder of Apiculture Ventures in Kenya, exemplifies AFAWA’s transformative effect. Initially securing $20,000 from an AFAWA-related bank, she grew 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 and seeing average annual earnings rise more than sevenfold. Similarly, Ebun Feludu, founder of Kokari Coconuts and Company in Nigeria, has expanded her business—established in 2016, transforming coconuts into high-end lifestyle, food, and personal care products. Her $40,000 loan from AFAWA facilitated her entry into the U.S. export market.

Adesuwa Okunbo Rhodes, founder and managing partner of Aruwa Capital Management, also shared her experiences running a private equity firm since 2019. She was driven by the fact that only 2% of venture capital funds are directed towards female entrepreneurs, while research indicates 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 embarked on the brave journey of creating my own fund as a solo female general partner. At that time, I was just 29 and five months pregnant,” she recalled.

AfDB President Encourages Investors to Champion Women-Led Businesses

With initial backing from wealthy individuals, mainly women, in Nigeria, the United States, and Europe, Aruwa effectively secured funding from the MasterCard Foundation and FSD Africa. By the end of 2022, the fund concluded its first oversubscribed round, amassing over $20 million. They have deployed capital to 10 businesses in Nigeria and Ghana, with approximately 70% of their portfolio being female-founded and female-led. They are currently supporting over 175,000 direct and indirect jobs through the SMEs they finance. Now, they are in the process of raising a $50 million fund,” she stated.

The successes of AFAWA and firms like Aruwa emphasize the potential of enhanced support for women-led businesses to yield significant outcomes, and Adesina called for increased investment in these ventures. “I urge all investors to join us in this vital effort to uplift women-owned businesses. When women succeed, African economies thrive. Let’s elevate women businesses and ensure they never go unnoticed again,” he asserted.