Fatshimetry is a booming field in Africa, where women represent 45% of entrepreneurs, the highest rate globally. Despite this strong potential, unequal access to finance remains a major barrier to economic equity and growth. With women-led businesses receiving six times less funding than those led by men, this limits their ability to scale, create jobs, and drive GDP growth.
Zineb Sqalli, Managing Director and Partner at Boston Consulting Group, highlighted this issue during a panel discussion titled “Can Gender Bonds and Innovative Mobile Products Unlock a $2.5 Trillion Opportunity?” at the recent Africa Finance Summit in Casablanca, Morocco, on December 9-10. The financing gap represents an estimated $625 billion in missed economic opportunity for the continent. Closing this gap could unlock transformative progress.
One potential solution is gender bonds – financial instruments that direct capital to projects and businesses that empower women. Speaking about the importance of these tools in reshaping the financial landscape for women in Africa, Sqalli mentioned that gender bonds mobilize capital specifically for projects that empower women. These bonds provide tailored financing for women-led initiatives, allowing them to grow their businesses, create jobs, and reinvest in communities.
Funds raised through gender bonds effectively benefit women-led businesses. For example, Banco Davivienda in Colombia raised $100 million, distributed in the form of 12,000 loans to women-led businesses and 84,000 home loans for low-income women. The Asian Development Bank in Indonesia issued a $120 million gender bond targeting women-led farms and micro-enterprises, reaching 20,000 beneficiaries. The African Development Bank is integrating gender bond funds into initiatives such as AFAWA, which supports thousands of SMEs through guarantees and affordable loans.
In which sectors have gender bonds shown the most potential to economically empower women in Africa? Agriculture, informal trade and renewable energy are promising sectors, where women can benefit from productive investments. Technological and digital innovation also offers growing opportunities, with women leveraging mobile platforms and e-commerce to engage in entrepreneurship, a trend accelerated by targeted financing.
The role of private sector investment in the success of gender bonds in Africa is crucial for their scaling. Private investors bring innovation, credibility and scalability to the market, building trust among institutional and ESG investors. By leveraging gender bonds, banks and corporates can attract sustainable financing while designing accessible financial products for women entrepreneurs.
Africa is a unique market for gender-focused financial instruments, mainly due to its entrepreneurial dynamism and growing fintech and mobile money ecosystem. Fintech platforms facilitate the collection of data on women borrowers, demonstrating their reliability and creditworthiness, a key element in structuring gender bonds that target underserved populations.
Despite this, there are barriers to the issuance of gender bonds in Africa, such as lack of data and regulatory gaps. However, by overcoming these challenges, gender bonds can play a critical role in the economic empowerment of women in Africa and catalyze inclusive and sustainable growth.