Empowering women entrepreneurs and fostering inclusive financial practices to drive sustainable economic growth across Africa

Feature Interview

In Conversation with Jules Ngankam, Group Chief Executive Officer, African Guarantee Fund

The 2nd Start-Up Night Africa event on 11 June 2024, in The Hague, The Netherlands, provided the opportunity to highlight the critical role of investment and the power of partnerships to address the gender finance gap for high-growth women entrepreneurs in Africa. Continuing the conversations on this important subject, Lionesses of Africa spoke to Jules Ngankam, Group Chief Executive Officer of the African Guarantee Fund, a real champion of empowering women entrepreneurs and fostering inclusive financial practices to drive sustainable economic growth across Africa.

Q:

Start-Up Night Africa exemplifies the power of partnerships in supporting the growth of women entrepreneurs, bringing together Lionesses of Africa in partnership with the Ministry of Foreign Affairs in The Netherlands, the African Guarantee Fund (AGF), and Absa Bank, with the focus being to champion their journey towards economic empowerment and success.  How important are such partnerships to AGF in helping to realize its own vision and goals?

A:

Partnerships are crucial to us at AGF, as this is how we are able to realize our vision of empowering women entrepreneurs across Africa. Through collaborations with governments, development finance institutions, banks, business development service providers and other institutions, AGF amplifies its reach and impact. These partnerships bring diverse resources and expertise, enriching AGF’s initiatives and enabling us to support more women entrepreneurs. Events like Start-Up Night Africa exemplify the power of these collaborations to foster networking and create new opportunities in line with AGF’s goals for women’s economic empowerment. Together, these joint efforts can influence policy changes, creating a more supportive environment for women entrepreneurs.

“Events like Start-Up Night Africa exemplify the power of these collaborations to foster networking and create new opportunities in line with AGF’s goals for women’s economic empowerment.”

Q:

At the heart of the Start-Up Night Africa event is the goal of connecting high growth women entrepreneurs with access to funding, international markets, and partnerships. Please share the vision of the African Guarantee Fund to empower women entrepreneurs through access to funding. Also, the important role played by the Affirmative Finance Action for Women in Africa – AFAWA initiative, and what it entails.

A:

Indeed, AGF shares this vision, and strives to empower women entrepreneurs by offering partner financial institutions partial credit guarantees and capacity development that enhance access to financing for Women SMEs (WSMEs). Through these two avenues, AGF addresses systemic barriers facing WSMEs, promoting gender equality in the business environment. A pivotal element in this mission is the African Development Bank’s Affirmative Finance Action for Women in Africa (AFAWA) initiative. As one of the implementing partners of the AFAWA initiative, AGF through the AFAWA Guarantee for Growth facility aims to unlock USD 2 billion for women entrepreneurs. These guarantees enable institutions to extend loans to women entrepreneurs across the continent, driving economic empowerment and fostering an environment where women-led businesses can thrive.

The AFAWA initiative comprises three key components:

1. Access to Finance: Offering partial credit guarantees to reduce the perceived risk for financial institutions lending to women entrepreneurs.

2. Technical Assistance: Enhancing the capabilities of financial institutions to better serve women, while improving women entrepreneurs’ financial literacy and business skills.

3. Enabling Environment: Advocating for supportive regulatory frameworks to create a more conducive business environment for women entrepreneurs.

Through these efforts, AGF and AFAWA partners are paving the way for a future where women entrepreneurs can thrive, unlocking unprecedented economic growth and opportunity across Africa.

Q:

As AGF is the implementing partner for the AFAWA Guarantee 4 Growth program, you are working with Financial Institutions across Africa to unlock financing of up to 2 billion dollars for women entrepreneurs. Please share how, at a practical level, the program will contribute to addressing the significant funding gap for women entrepreneurs, and importantly, how will it positively change the way banks do business with them?

A:

Our objective as we implement the AFAWA Guarantee for Growth (G4G) is to address the critical funding gap faced by women entrepreneurs across Africa by targeting barriers such as lack of collateral, limited financial literacy, and bias in accessing financial services. More practically, AGF partners with financial institutions, offering guarantee mechanisms that mitigate the perceived risks of lending to women entrepreneurs. This way, banks are encouraged to extend loans they might otherwise see as too risky, ensuring more women gain access to the capital needed to grow their businesses. Additionally, under AFAWA capacity development grant, AGF equips its PFIs with the tools and knowledge to effectively assess and manage loans to women-owned businesses, fostering the development of tailored financial products that meet the specific needs of women entrepreneurs.

AGF’s Monitoring and Evaluation systems track the impact of these loans, ensuring continuous improvement in lending practices. This transformative approach not only helps reduce the funding gap but also positively changes the way banks do business with women entrepreneurs, paving the way for sustainable economic growth and empowerment across the continent.

“By proactively supporting capacity development, AGF aims to create a thriving ecosystem where women entrepreneurs can access the funding and resources they need to grow and succeed.”

Q:

Capacity development has been identified as a key priority to empower women entrepreneurs to successfully access growth funding. Please share how AGF is proactively supporting capacity development to financial institutions and women entrepreneurs through the AFAWA programme, and in partnership with organizations such as Lionesses of Africa. What impact are you looking to achieve?

A:

Capacity development is at the heart of AGF’s strategy to empower women entrepreneurs and enhance their access to growth funding through the AFAWA program. AGF’s PFIs have access to a grant that they can use for comprehensive training programs focusing on gender-smart investment practices. The AFAWA Finance Series that commenced in 2022 has in its agenda a two-day training for financial institutions on best practices around gender lens investing. By providing technical assistance, AGF guides these institutions in risk management, credit assessment for women entrepreneurs, and operational practices that foster inclusive lending. This ensures banks are better equipped to meet the needs of women-led businesses. AGF also supports its PFIs to organize workshops for WSMEs to enhance their business skills in financial management and strategic planning. These workshops are conducted by business development service providers who offer mentorship, networking opportunities, and access to tailored business resources — like our collaboration with Lionesses of Africa.

The expected impact is multifaceted: enhanced lending capacity of financial institutions, increased business success for women entrepreneurs, and broader economic empowerment as women contribute more significantly to their communities and economies. By proactively supporting capacity development, AGF aims to create a thriving ecosystem where women entrepreneurs can access the funding and resources they need to grow and succeed.

Q:

This is the second year that Start-Up Night Africa has been hosted in The Netherlands, a synergistic host country for the event with its Feminist Foreign Policy and Africa Strategy, which prioritize the empowerment and investment in women entrepreneurs as key drivers of economic and social development. How important is the partnership with countries such as The Netherlands to create an enabling environment for women to thrive and contribute to the prosperity of their communities and beyond?

A:

Strategic partnerships with countries like The Netherlands are invaluable in creating an enabling environment for women entrepreneurs to thrive and contribute to the prosperity of their communities and beyond. It is important to note that The Netherlands is one of the donors of the broader AFAWA program. Hosting Start-Up Night Africa in The Netherlands, a country known for its Feminist Foreign Policy and Africa Strategy, brings global support and recognition to existing initiatives such as AFAWA.

Initiatives like Start-Up Night Africa provide a platform for stakeholders to brainstorm and innovate, enabling AGF to adapt and evolve its strategies to meet the changing needs of women entrepreneurs. AGF also gains access to knowledge exchange opportunities fostering new and innovative approaches to support women-led businesses.

Ultimately, such partnerships are important because they enhance the visibility of women entrepreneurs and highlight their significant contributions to economic and social development. By working with progressive nations, AGF amplifies its impact, creating a more inclusive and prosperous future for women across Africa.

Q:

As the African Guarantee Fund ramps up the roll-out of the AFAWA Guarantee 4 Growth program over the coming weeks and months, and women entrepreneurs start to benefit from the capacity development programmes that will enable them to access much needed growth funding, what impact would you like to see achieved one year from now? What are your ambitions for the program in terms of changing the statistics of women entrepreneurs successfully accessing growth funding?

A:

As we continue to roll out the AFAWA Guarantee 4 Growth program, the impact we aspire to see is transformative and far-reaching. We envision increased access to finance for WSMEs, enabling them to grow and thrive. Highlighting success stories of women entrepreneurs who have benefited from the program will serve as powerful inspirations for others, showcasing the tangible results of our efforts.

Our ambition includes enhanced financial literacy and business acumen among women entrepreneurs, equipping them with the skills necessary for sustainable success. We aim to see significant progress towards more gender-inclusive policies within financial institutions, fostering an environment where women-led businesses can flourish. Measurable growth in women-led businesses will contribute to job creation and broader economic development, demonstrating the substantial impact of empowering women entrepreneurs.

We seek the establishment of sustainable practices within financial institutions that consistently support women entrepreneurs, ensuring long-term benefits. Our goal is to change the statistics, dramatically increasing the number of women entrepreneurs who successfully access growth funding, driving economic and social development across Africa.

“Our goal is to change the statistics, dramatically increasing the number of women entrepreneurs who successfully access growth funding, driving economic and social development across Africa.”

Q:

In line with the vision you have at African Guarantee Fund, through the AFAWA Guarantee 4 Growth programme, to close the funding gap for women entrepreneurs, is there a message you would like to send to both women entrepreneurs and to financial institutions to ensure that vision is realized?

A:

My candid message to women entrepreneurs is: Believe in your potential. Trust in your capabilities and pursue your business goals with confidence. Leverage the resources and support available through financial institutions and organizations like Lionesses of Africa to build networks and collaborate with other entrepreneurs and mentors to sustainably enhance your business growth.

To the financial institutions, I’ll say: Champion inclusive lending practices that support women entrepreneurs! Develop innovative financial products tailored to the needs of women-owned businesses. Forge partnerships with organizations like AGF to better serve your WSME clients. Lastly, track and report on the impact of your lending to women entrepreneurs to continuously improve your services using data-driven insights and feedback.

Remember, increasing access to finance for women entrepreneurs is not a matter of doing them a favour but is indeed a business worthy investment.

By empowering women entrepreneurs and fostering inclusive financial practices, we are empowering our communities and driving sustainable economic growth across Africa.