The African Development Bank Group (AfDB) announced on Monday in a press release an equity investment of 18 million euros in the Africa Guarantee Fund (AGF) and another of 1.2 million euros to support young women and entrepreneurs engaged in agricultural value chains in Kenya.
This financing, approved by the AfDB Board of Directors on June 6, 2023 in Abidjan, was provided by the European Union (EU) as part of its partnership with the Bank.
According to the AfDB’s Director General for East Africa, Nnenna Nwabufo, this approval constitutes « another important step in the implementation of the partnership with the European Union, which also testifies to the importance given to the role women and youth in the agricultural sector in Kenya”.
The statement highlights that the demand for micro, small and medium-sized enterprises (MSMEs) funding remains unmet in Kenya and has been compounded by the disruptions caused by the Covid-19 pandemic. The International Finance Corporation (IFC, a subsidiary of the World Bank) estimates the financing gap for SMEs at $19.38 billion, which represents 30% of the country’s gross domestic product (GDP).
Women face many constraints that hinder their access to finance and the growth of their businesses. These include, the text continues, a lack of business management skills, legal, social and political barriers, limited access to networks and information, and financing options. inadequate to meet their specific needs.
The same source indicates that banks often perceive women-led businesses as risky due to the poor quality or low number of assets that can be used as collateral and the generally smaller size of businesses. Therefore, supporting women entrepreneurs and catalyzing private investment in this segment are crucial steps to foster inclusive economic growth in Kenya.
The Africa Guarantee Fund (AGF) is a pan-African private, non-bank, limited liability financial institution headquartered in Nairobi, Kenya. Its objective is to stimulate SMEs’ access to finance and capacity development, thereby increasing employment and reducing poverty.
By OMA Newsletter N° 1227 of 06/26/2023
Article published under the direction of Dr. Najib Kettani
The OMA, NGO with an Intercontinental vocation
For the development of cultural exchanges
Valuing human potential
The promotion and consolidation of Africa’s development, and
Inter-African integration
