Rwandan and African female entrepreneurs will soon reap from the hottest $1billion lending package from the European Investment Bank (EIB), under the bank’s gender-lending initiative to allow them to play a more active role in economies.
At the ongoing African Investment Forum in Johannesburg, South Africa, the European Investment Bank announced a $1.1 billion lending programme to help women entrepreneurs on the continent.
EIB Vice President, Ambroise Fayolle, also revealed that the bank has signed three further agreements to boost sustainable development on the continent.
But the major deal is what the EIB has dubbed “SheInvest”.
“This initiative aims to promote female entrepreneurship,” said Fayolle, noting that female entrepreneurs will also gain business skills from the initiative.
He explained that the financing will promote gender investment related to climate change and is part of broader European engagement to provide targeted support for new investment that supports increased female economic participation in Africa.
Africa is the only region in the world where more women than men choose to become entrepreneurs, a phenomenon that is not the subject of adequate discussion, according to the World Bank.
However, the bank’s data collected in ten African countries indicated that on average, male-owned enterprises have six times more capital than female-owned enterprises.
The fact that women have less access to assets affects their ability to obtain medium-sized loans and, in turn, impacts the growth of their enterprises. To solve the problem, the bank provides solutions including by giving women more control over assets through, for example, the granting of joint property rights – giving a case of Rwanda, or by eliminating the need for collateral. In Rwanda, an estimated 41 percent of businesses are run by women.
The EIB is the lending arm of the European Union. The EIB has supported investment in Africa for more than 50 years. Last year, it provided a record €3.3 billion to African countries, with more than half the funds being pumped into the private sector.
The Africa Investment Forum inaugural edition was launched in 2018 in partnership with Africa50, Afrexim Bank, the Trade Development Bank, and the Development Bank of South Africa, the Islamic Development Bank, the Africa Finance Corporation and the European Investment Bank.