African Guarantee Fund has signed a USD 5 million risk sharing partnership agreement with the Kenya Women Microfinance Bank PLC (KWFT) in a move to boost financial inclusion for Women-led or owned Small and Medium Enterprises (WSMEs) in Kenya. The partnership will unlock up to KES 3 billion in financing for over 1000 Women SMEs in Kenya, addressing the significant financing gap faced by women entrepreneurs.
This partnership signifies a major achievement in AGF and KWFT’s dedication to championing WSMEs and fostering inclusive economic development in East Africa. It will economically empower women entrepreneurs, create jobs, and contribute to the development of the region.
Speaking at the ceremony, AGF Group CEO, Jules Ngankam said, “One of our goals for this partnership is to prioritize capacity building that equips women entrepreneurs with the essential skills and knowledge needed to build sustainable businesses and access market opportunities that will drive Africa’s economic growth and development”.
The partnership is fully backed by the African Development Bank’s Affirmative Finance Action for Women in Africa (AFAWA) initiative, which aims to expand AGF’s reach in supporting women-led or owned businesses.
“As the implementing partner of the AFAWA Guarantee for Growth program, we are confident this collaboration will go a long way in enabling us meet our goal of bridging the gender financing gap in Africa. Our partnership with KWFT will support women SMEs by not only unlocking financing but also providing technical assistance which are both two key pillars of the AFAWA program,” added Jules.
The risk-sharing mechanism, will enable KWFT to increase its on-lending activities to WSMEs with a view of promoting enterprise growth in the Kenya. This loan portfolio guarantee will also support expansion of KWFT’s green initiatives that address climate change and contribute to job creation and sustainability, with a focus on driving sustainable inclusion and economic growth.
Mr. Kariuki Kitabu, KWFT MD, expressed his enthusiasm about the partnership, stating, “This collaboration with AGF marks a significant milestone in our journey towards empowering women entrepreneurs and enhancing financial inclusion in Kenya. We are confident that through this partnership, we will strengthen our operations and better serve our clientele, thereby contributing to women economic empowerment.”
AGF will additionally provide capacity development assistance to increase KWFT’s ability to recruit and appraise WSMEs, enhance its automation, train staff, as well as implement growth strategies to upscale the Bank’s WSMEs to reach their full potential.
With a financing gap of over USD 49 billion impacting women SMEs in Africa, the partnership will address barriers such as limited access to information, collateral requirements, cultural biases, complex business processes, and the disproportionate impact of climate change on WSMEs.