On April 3, 2020, the Board of Directors of the African Development Bank Group (AfDB) announced the approval of a new Gender Equality Trust Fund (GETF) which aims to promote gender equality and women’s empowerment across the continent. It is the first thematic fund on gender in the Bank Group’s history.
This comes a few days after the Board approves a Risk-Sharing Mechanism which focuses on promoting the profiles of female entrepreneurs in Africa, on Tuesday 31 March. The AfDB’s Risk-Sharing Mechanism is an innovative financial instrument to derisk women-empowered businesses, enhance their profile with banks and support them to grow and thrive as entrepreneurs.
The facility will support the delivery and scale-up of the AfDB’s Affirmative Finance Action for Women in Africa (AFAWA) programme which seeks to bridge the $42 billion financing gap facing women entrepreneurs in the continent. GETF will also promote gender-transformative lending and non-lending operations.
Speaking on the approval, the bank’s President, Akinwumi Adesina said, “It is a great day for the continent and the women of Africa as this facility provides innovative ways to tackle the access to finance challenges for African women business owners.”
Also commenting on the approval, Vanessa Moungar, Bank Director, Gender, Women and Civil Society, stated that the Fund’s resources and the Risk-Sharing Mechanism would prioritize women’s economic empowerment and high-impact women’s initiatives. She further described the approval as “the largest effort ever to bridge the gap in access to finance for women in Africa’s history.”
The current ravaging impact of the novel coronavirus has deeply depressed the global economy. Due to lockdown measures imposed by most governments globally, most businesses have been forced to put a stop to all production activities, especially the non-essential businesses. This is causing a huge strain on female entrepreneurs in the continent who have before long battled with the problem of limited access to capital. With the GETF, more female entrepreneurs would have access to funds to help cushion the negative impacts of the coronavirus pandemic
In an interview with Ventures Africa, Rosemond Phil-Othihiwa, CEO of Rosemond’s Palace, an online retail startup said, “What this fund would do will be to provide enough leverage to cushion pending payments and deliverables to customers and clients worldwide. It would also give room for expansion and leveraging the use of technology to make service delivery more efficient, seamless and effective. If I gain access to it, I would be able to expand my services from regular luxury items to other health care and technologically driven products to clients all over the nation.”
Small and Medium Enterprises (SMEs) remain a significant driver for any given economy as they keep production activities rolling daily, bringing about the regular flow of cash within it. While the pandemic bites hard on the global economy, the process of accessing the AFDB’s Gender Equality Trust Fund should be made flexible enough for female entrepreneurs in Africa to gain access for business growth.
The GETF is expected to be established for an initial period of 10 years. Key investors funding the facility include the governments of France, the Netherlands and the United Kingdom.