The African Development Bank and AXIAN Group have launched a digital-finance programme designed to expand access to finance and business support for more than 34,000 women-led micro, small and medium-sized enterprises across several African markets.
The programme, announced on 2 September, will initially provide digital financial products to women-led businesses in Madagascar, Tanzania and Senegal, while 25,000 women across those countries, Togo and Comoros are expected to receive financial, digital and entrepreneurship training.
According to the African Development Bank, the initiative is supported through its Affirmative Finance Action for Women in Africa programme, known as AFAWA, and the Women Entrepreneurs Finance Initiative.
Using digital finance to reach smaller businesses
The significance of the programme extends beyond the number of businesses targeted. Women entrepreneurs across African markets often face difficulty accessing formal credit because of collateral requirements, limited credit histories and the informality of many smaller businesses.
Digital financial services can offer alternative routes to reach those businesses. Mobile transactions and other digital records can help financial providers understand business activity, while mobile channels can reduce the cost of serving customers who are distant from conventional branches.
The AfDB says the new programme will combine access to digital financial products with capacity building, rather than treating credit as the only constraint facing women-owned enterprises.
A wider financial-inclusion strategy
AFAWA was created to address financing constraints facing women entrepreneurs and works with financial institutions to expand lending alongside technical assistance. The AXIAN partnership places mobile and digital finance more directly within that effort.
AXIAN operates telecommunications and financial-services businesses in several African markets. The new initiative follows earlier financing from the AfDB to AXIAN Telecom, including a $160 million package intended to support network expansion and digital inclusion.
The latest programme should not be interpreted as 34,000 businesses receiving grants. It combines access to financial products with training and business support, with the precise type of financing available depending on the participating markets and products.
The challenge is converting access into growth
For development institutions, expanding finance to women-led businesses is increasingly linked to wider questions of employment, formalisation and productivity. Smaller firms account for a large share of economic activity across the continent but often struggle to invest, expand inventories or adopt technology because financing is limited or expensive.
Digital lending does not remove those underlying business risks, and poorly designed credit can create new problems if affordability and consumer protection are weak. The development test will therefore be whether products are appropriate to the cash flows of small businesses and whether training helps entrepreneurs use finance productively.
The AfDB-AXIAN programme is notable because it brings those elements together: digital distribution, financing and business capability. If implemented effectively, it could provide another model for reaching enterprises that conventional collateral-heavy banking has struggled to serve.
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