(Ecofin Agency) - Accessing financing is a real headache for SMEs in Africa, especially women-led SMEs. Proparco, the private sector financing arm of the French Development Agency, announced last March 8 it has made an investment of $10 million in the African Guarantee Fund (AGF) to support these businesses.

This investment will be used to support African women entrepreneurs, grouped within the Affirmative Finance Action for Women in Africa (Afawa) co-founded by AGF. “The main barrier in Africa to SME growth is access to finance. This challenge is heightened when it comes to women-led SMEs, as they are perceived to be riskier and face prohibitive interest rates,” said Jules Ngankam, AGF's Managing Director.

Before Proparco, the African Guarantee Fund through its subsidiary AGF West Africa, granted a guarantee last February to an Ivorian microfinance (Fin'elle), specialized in women's entrepreneurship, to cover loans granted to women-led SMEs. The recent commitment made in the form of a capital increase will enable AGF to support women's entrepreneurship by improving conditions for access to financing and building the capacity of women entrepreneurs.

According to the 2016-17 Global Entrepreneurship Monitor (GEM) report, Africa is home to the largest number of female entrepreneurs in the world. In the sub-Saharan part, the rate reaches 25.9% of the adult female population. Yet women entrepreneurs face an estimated $42 billion financing gap across value chains, including $15.6 billion in the agriculture sector.

Chamberline Moko