Insights from the World Bank GROW Expo
Despite women contributing nearly 40% of Africa’s GDP, they receive less than 7% of private equity and venture capital funding–and only a fraction of that reaches women-led SMEs. At the recent World Bank’s GROW Expo in Uganda, the Graça Machel Trust’s Afrishela Fund challenged this disparity with a bold solution: redefining risk evaluation through its pioneering Alternative Credit Assessment Framework.
Why traditional financing fails women
Women entrepreneurs face systemic barriers in accessing capital. Traditional credit assessments rely on rigid criteria–high collateral demands, inflexible loan structures, and biased risk models–that disproportionately exclude women, who often lack property titles or formal credit histories. The result? A $42 billion financing gap for African women-owned SMEs (IFC, 2024).
At the recent GROW Expo, hosted by the World Bank and Uganda’s Ministry of Gender, the Graça Machel Trusts’ Afrishela Fund highlighted how these outdated tools perpetuate inequality.
As Jane Mbinya, Senior Investment Officer for Afrishela, emphasised during her breakout session: “When loans require land as collateral in a country where only 20% of women own land, we’re not assessing risk–we’re enforcing exclusion.”
Afrishela’s new model expands who can get a loan by:
Accepting different collateral
- Uses movable items like equipment, stock or future sales as security; along with cash as collateral.
- Welcomes personal and group guarantees from savings circles, so everyone shares responsibility.
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Fairer risk scoring
- Adjusts for bias, acknowledging that women often repay reliably even with smaller loans.
- Looks beyond numbers to assess a business’s potential and the owner’s experience.
Responsive support
- Offers post investment support to address potential risk areas identified during due diligence.
- Recognises the role of innovative financing instruments in managing actual and perceived risk.
How this works in practice? Afrishela has tested this within its own portfolio and seeks to further test this new credit model with partner banks then use those results to push for a market shift to include more qualitative considerations in risk assessment.
Partnerships for progress
The GROW Innovation Lab, launched at the Expo is a promise as it will serve as a living laboratory for Afrishela’s model. Early adopters among financial institutions and ecosystem players are already reporting increases in women’s access to capital, validating the Framework’s promise.
As Dr Theopista Ntale Sekitto, Country Director of the Trust New Faces, New Voices network in Uganda, put it: “This isn’t about lowering standards. It’s about recognising the untapped potential of women marginalised by narrow credit definitions.”
“When women thrive, economies grow,” affirmed Serena Cavicchi, World Bank GROW Lead. Afrishela’s Alternative Credit Assessment Framework provides new opportunities for individual entrepreneurs and lays the groundwork for more equitable, resilient financial systems across Africa.
Watch the Expo Recap here.