Fund earns G7 recognition for investing in African women entrepreneurs

African Guarantee Fund (AGF) CEO Jules Ngankam. [David Gichuru, Standard]

The African Guarantee Fund (AGF) has earned the recognition of international development finance institutions (DFIs) under the 2X Challenge Collaborative recently pioneered by the Group of 7 (G7) countries.

The 2X initiative was launched at the G7 Summit in 2018 as a joint commitment by global DFIs to move more capital with a gender lens all over the world through pension funds, financial institutions, asset and wealth managers, private equity and venture capital funds, among other capital providers and mobilisers.

These include the US Development Finance Corporation (DFC), the Japan International Cooperation Agency (JICA), the International Finance Corporation (IFC), Swedfund, and Finnfund, among other social impact financiers.

Recent data show that between 2018 and 2020, the member DFIs invested and mobilised over Sh1 trillion ($11) billion and subsequently announced a new Sh1.8 trillion ($15 billion) target at the G7 Summit in 2021 for the period 2021-2022.

Come June this year, the gender lens investing (GLI) network also developed a certification mechanism which aims to create more transparency and credibility for the investment industry through its five-point "2X Investment Framework".

It means the 2X challenge accreditation is awarded to organizations that aim to advance opportunities for women through enterprise support, leadership and career progression, quality employment and products that enhance women's economic participation.

This as research shows that despite being the backbone of both the African community and economy, women still face the largest financing gap.

Female entrepreneurs moreover face a myriad of challenges including a high lending risk, prohibitive interest rates, lack of collateral, participative hindrances posed by the current legal and regulatory frameworks, as well as the low affinity of financial institutions to appropriately respond to the African entrepreneurs' needs.

"With the increase in African female entrepreneurship our governments have higher tax collection, our financial institutions have more customers and generate more revenue. Our businesses and the retail sector also have increased customer numbers which increases revenue and the households and communities surrounding these women benefit from more income and a better quality of life," said AGF Chief Executive Jules Ngankam.