NAIROBI, Nov. 21 (Xinhua) — African finance experts gathered in Kenya’s capital Nairobi on Tuesday to discuss how to expand access to finance for women-led businesses in Africa.
The sixth edition of the Finance Affirmative Finance Action for Women in Africa series brought together government representatives, financial regulators and bank executives from across Africa to address the challenges facing women-owned small and medium-sized businesses when seeking credit with a view to strengthening financial inclusion on the continent.
In her opening remarks, Marie-Laure Akin-Olugbade, Vice President, Regional Development, Integration and Business Delivery Complex at the African Development Bank, said women-owned businesses in Africa are facing a $42 billion financing gap because they are perceived to have a high default risk from financial institutions.
“Financial sector players should develop innovative instruments that will enable more women-led businesses to access credit from formal financial institutions,” Akin-Olugbade said.
She revealed that the majority of women-owned businesses in Africa are in the informal sector and therefore cannot access credit from commercial banks.
James Muhati, principal secretary of Kenya’s State Department of Economic Planning, said women entrepreneurs often lack collateral such as land and therefore face difficulties in accessing loans from financial institutions.
Muhati noted that Kenya is revamping its credit guarantee system which will provide disadvantaged groups such as women with low-interest loans to enable them expand their businesses.
Susan Koech, deputy governor of the Central Bank of Kenya, said risk guarantee mechanisms could enable financial institutions to increase lending to women-led small businesses in Africa.
Koech observed that women also need to be equipped with the knowledge, confidence and skills to help them choose the appropriate financial services and products currently available in the market.