The African Development Bank (AfDB), has disclosed that it has approved over $800 million in investments for on-lending to 3,000 women SMEs In Nigeria and 22 African countries.
Speaking at the African SME Immersion Fund Roundtable Event with the theme, “Enhancing the capabilities of MSMEs in Africa-The Role of DFIs”, in Lagos, Director General, Nigeria Country Department of AfDB, Lamin Barrow, added that in Nigeria, it supported over 20,500 MSMEs which led to the creation of over 440,000 jobs, with women and youth accounting for 60 per cent of the jobs.
Barrow noted that with the growth of MSMEs hampered by poor access to affordable finance, perceptions of high default risk due to key man risks, information asymmetries, the disruptions to global and regional supply chains, and tightened financing conditions in the wake of the COVID-19 pandemic, it was crucial that the Bank continue to support the MSMEs dominated private sector.
“The private sector landscape in Africa is dominated by MSMEs who constitute the backbone of African economies. Through their investments, innovation and trading activities, they play a critical role in fostering inclusive growth and creating jobs.
“In Nigeria, for instance, MSMEs employ about 77% of the workforce and are dominated by women who face greater challenges in accessing affordable finance and non-financial services, due to gender biases in property rights that limit their ability to collateralize their loans,” he said.
The AfDB chief said that as part of policy reforms efforts meant to foster inclusive and gender responsive solutions for women SMEs, its Africa SME Programme will channel $150 million funding to SMEs through FIs across Africa to enhance financial inclusion while also addressing barriers to SME funding.
He said: “The Bank has also launched the Affirmative Finance Action for Women in Africa (AFAWA) as a flagship initiative to close the $42 billion access to finance gap for women led and owned SMSEs. Through AFAWA, the Bank will facilitate up to $5 billion in credit access to women SMEs by 2026.”
Also, as part of efforts to support the venture capital industry in Africa, AfDB is currently implementing 3 three flagship programs.
This includes; a Euro 170 million facility being implemented in partnership with the European Commission and European Investment Bank and the Social Impact Investment Program for Africa (SIIPA), a Euro 50 million programme that seeks to support social entrepreneurs to provide solutions for the local communities, often related to better -and affordable- access to finance, health, education, basic (soft) infrastructure (water & sanitation, internet, etc.), and markets.
“Investment in Digital and Creative Enterprises Programme (i-DICE), which is co-financed by Agence Française de Développement (AFD) and the Islamic Development Bank (IsDB), is a $618 million flagship initiative seeking to promote entrepreneurship and innovation in the digital and creative industries. The Program will support the creation of a venture capital Fund to finance start-ups in Nigeria,” he said.