A huge $5.2 trillion funding gap for micro, small, and medium enterprises (MSMEs) and a $42 billion financing gap for African female entrepreneurs worldwide calls attention to the urgent need for inclusive financial solutions.
Nevertheless, only 18% of available funding reaches women-owned businesses, and female entrepreneurs receive just 58% of the loan value their male counterparts secure.
These statistics are the foundation for the Gender Bonds Toolkit Dissemination Workshop, hosted by FSD Africa in partnership with UN Women, which kicked off on Tuesday, January 28, 2025, at the Radisson Blu Anchorage Hotel, Lagos.
Tokunboh Ishmael, CFA, managing director and co-founder of Alitheia Capital, presented a keynote that stressed the economic imperative of gender-smart financing.
“Investing in the women economy and being intentional about investing in female founders is not just a moral obligation but an economic imperative,” she said.
Ishmael revealed that her organisation’s Gender Lens Fund, launched in 2014, has invested over 70% of its capital into women-led businesses, creating nearly 10 million jobs and providing essential goods and services to over 50 million women and girls.
Likening a football team playing with seven players, rather than the full team, to excluding 50% of Africa’s population from economic participation, she said; “You’d have to be really good to win.”
“In Africa, we lose at least 13% of our GDP annually because over 50% of small businesses cannot access significant funding,” Ishmael said. “Gender parity, under current trends, will take five generations to achieve,” Ishmael said.
The workshop, which brought together financial institutions, policymakers, and development organisations, was a launch of the Africa Gender Bond Toolkit, a guide for issuing bonds designed to empower women and bridge the financial inclusion gender gap.
Adeola Ukoha, coverage manager for Nigeria at British International Investment (BII), emphasised the indispensable part gender inclusion has to play in economic growth.
“Economies grow when we are inclusive of all people, regardless of gender, ethnicity, or income level,” she said, adding that BII’s gender finance strategy focuses on increasing women’s participation in the private sector through ownership, leadership, and workforce representation.
In gender finance, BII has adopted innovative investment approaches. “In 2021, we launched our directed lending approach to intentionally target women-led and owned small and medium enterprises,” Ukoha explained.
BII has also pioneered the use of guarantees, bonds, and blended finance structures to mitigate perceived risks and expand women’s access to financing.
The Power of Gender Bonds
UN Women’s Nigeria Country Representative, Beatrice Eyong, outlined the need for gender-focused financial mechanisms, revealing that: “Over 340 million women and girls – 8% of the global female population – will live in extreme poverty by 2030 if current trends continue. Africa, home to 65% of the world’s poor, stands at the heart of this issue.”
Eyong pointed to the success of Tanzania’s Jasiri Bond, the first listed gender bond in sub-Saharan Africa. Introduced in 2022, the bond mobilised $32 million and provided financing to over 3,000 women-owned MSMEs. “Behind the statistics are lives – women, children, and families – whose suffering demands urgent action,” she stated.
The new toolkit aims to replicate such successes across Africa by providing guidance for issuing gender bonds. It builds on a growing global trend where by the end of 2023, 360 gender bonds had been issued globally, a commendable climb from just 49 in 2020.
The Role of Collaboration
The workshop also highlighted the importance of multi-stakeholder collaboration. Sally Woolhouse, head of Economic Development, Climate and Energy at FCDO Nigeria, said “It’s beneficial to have regulators, the public sector, and the private sector convene in the same room. This promotes deliberate discussion across the ecosystem,” she said.
Similarly, Eyong stressed the importance of partnerships in promoting women’s economic empowerment. “If we can’t achieve SDG 5 – gender equality – we will never achieve the other Sustainable Development Goals,” she asserted.
Mrs. Oreoluwa Finnih, special adviser to the Lagos State Governor on Sustainable Development Goals (SDGs) and Investments, noted the importance of gender-focused policies in driving economic growth and social progress. In her address, she said:
“It’s not just about elevating women for the sake of elevation. We know all the data. We have all the statistics, and you would think that because we know the good things that come out of making sure women are financially empowered, we would quickly do what is right, but not necessarily so.”
Mrs. Finnih revealed that Lagos State is set to domesticate the federal government’s Women Empowerment Policy (We Policy) in 2025. This step will go beyond adopting national recommendations to also adapting them to Lagos-specific challenges.
Including policy, the Office of Sustainable Development Goals actively engages communities. She explained:
“We go into communities, speak to women, and educate them about financial inclusion. It’s great to give people money, but what is more important is for them to know how to handle it.”
An aspect of this outreach involves collaboration with the Nigerian Identity Management Commission (NIMC) to ensure women can open bank accounts, a prerequisite for financial inclusion. “A lot of women do not have accounts. Women work, they work, and then they pay their money into other people’s accounts – could be a child, could be a spouse – and often, those funds are not received.”
Lagos State’s SDG agenda aligns with three key pillars: energy transition, climate action, and sustainable development.
The Africa Gender Bonds Toolkit was first launched in Zambia in June 2024 to ensure gender equality through sustainable finance. It helps in addressing gender differences while promoting innovation and collaboration in financial markets.
UN Women plans to expand the toolkit to include additional resources, such as guidance on gender-responsive climate resilience and care infrastructure financing. “Africa has huge potential for sustainable finance, and we must utilise it to empower women and girls,” Eyong concluded.
“Let us move from awareness to action and ensure these financing approaches make meaningful contributions to women’s empowerment.”
Only 6% of Measurable SDGs Will Be Achieved by 2030 – FSD Africa Highlights at Gender Bonds Workshop
Mary Njuguna, principal specialist, Capital Markets at FSD Africa revealed that only 6% of measurable Sustainable Development Goals (SDGs) will be achieved by 2030.
Njuguna noted the importance of leveraging capital markets to unlock long-term financing for sustainable development. “Capital markets are where those with long-term capital make it available to those who need it for sustainable development and other long-term objectives,” she explained.
She pointed out that the reliance on short-term financing mechanisms, such as bank assets, creates a mismatch and leaves economies vulnerable to shocks.
One of the workshop’s key insights was the significant but underutilized pool of private capital in Africa. In 2022, institutional investors in the region held approximately $2.5 trillion in local currency assets, a figure projected to triple by 2040.
However, much of this capital remains locked in government securities rather than being channelled into productive uses. Njuguna called for “de-risking long-term projects” and creating innovative financing instruments, such as gender bonds, to attract private capital toward development goals.
Nigeria’s capital markets also came under the spotlight, with Njuguna noting the commendable growth of local assets. Pension fund assets, for instance, grew by 89% between 2018 and 2023, while collective investment schemes saw a 96% increase during the same period. Despite this growth, currency fluctuations and high interest rates are highly challenging.
“Local currency financing is necessary. It reduces risk and the cost of capital, ensuring long-term sustainability,” she noted.
Njuguna further stressed that addressing the gender financing gap is important to Africa’s sustainable development. “There is so much capital needed for our growth as a continent. Public finance will not be enough,” she stated, reiterating the need for capital markets to provide diversified and innovative funding solutions.
