African finance experts met on Tuesday in Nairobi, the capital of Kenya, to discuss how to expand financial access for women-led enterprises in Africa.
The sixth edition of the Affirmative Finance Action for Women in Africa Finance Series brought together government representatives, financial regulators and banking executives from across Africa to address challenges that women-owned small and medium enterprises face while seeking credit with a view of strengthening financial inclusion on the continent.
In her opening remarks, Marie-Laure Akin-Olugbade, vice president of Regional Development, Integration and Business Delivery Complex at the African Development Bank, said that women-owned businesses in Africa face a 42-billion U.S. dollar financing gap because they are perceived to have a high default risk by financial institutions.
“Players in the financial industry should develop innovative instruments that will enable more women-led enterprises to access credit from formal financial institutions,” Akin-Olugbade said.
She revealed that the bulk of women-owned enterprises in Africa are in the informal sector and thus cannot access credit from commercial banks.
James Muhati, principal secretary in Kenya’s State Department of Economic Planning, said that women entrepreneurs often lack collateral such as land and therefore face challenges in accessing loans from financial institutions.
Muhati noted that Kenya is in the process of revamping its credit guarantee scheme that will offer disadvantaged groups such as women loans at low-interest rates to enable them to expand their businesses.
Susan Koech, deputy governor of the Central Bank of Kenya, said that risk guarantee facilities could enable financial institutions to increase their lending to women-led small enterprises in Africa.
Koech observed that women also need to be equipped with the right knowledge, confidence and skills to help them choose appropriate financial services and products that are currently available in the market.