UNDP, UN Women Advance Funding for Afghan Women Entrepreneurs

A new joint collaboration between United Nations Development Programme (UNDP) and UN Women is set to promote financial inclusion and entrepreneurial ventures for Afghan women entrepreneurs with better access to financing and business development services.

The Afghanistan Women’s Fund for Resilient Enterprises (AWFRE) will provide services and support female entrepreneurs by helping address key challenges that prevent them from securing finance, developing necessary business know-how, and accessing markets. Through its activities, the new initiative will initially invest USD 1.7 million into supporting up to 1,500 women entrepreneurs over one year. Moreover, the programme is likely to bring about some additional economic effects as it will indirectly benefit more than 14,000 people due to enhanced business operations.

Key Highlights:

• UNDP and UN Women launch financing initiative for Afghan women entrepreneurs
• AWFRE invests $1.7 million to support 1,500 women entrepreneurs in one year
• Additional $10 million aims to reach 10,000 more women entrepreneurs

The programme will be offering Sharia-compliant financing to women along with various types of business development services such as financial and digital literacy, entrepreneurship training, mentorship, business planning and market access assistance. Provision of capital coupled with business know-how aims to allow women entrepreneurs to enhance their business performance and learn ways to manage and grow their finances becoming more resilient to market changes.

For the wider dissemination of this initiative, UNDP and UN Women intend to raise an additional $10 million. This will lead to about 10,000 women entrepreneurs accessing funding and business development services. The initiative will also provide indirect economic gains as it will benefit 70,000 other people through business expansion, employment and household income.

At the same time, over 10,000 women in Afghanistan currently own business licenses, ten times more than what was five years ago with about 120,000 more unlicensed traders, as per estimates by the Afghanistan Chamber of Commerce.

This initiative will address finance problems faced by with most of them having little or no access to traditional banking and digital financial services. Fewer than 7% of Afghan women possess a bank account or have access to mobile money facilities, making it difficult for them to access business financing or any form of traditional financial services.

Without financial services women entrepreneurs resort to self-finance, informal borrowing from relatives or friends, or the sale of personal possessions to raise funds for their businesses. This lack of financing may hamper the flow of cash, working capital, investment capital, and business expansion, especially those wanting to go beyond the small-business stage.

As highlighted by the UN Women Special Representative Susan Ferguson, access to finance remains a critical facilitator of the entrepreneurial success of women. It will empower women entrepreneurs with the required capital and investment capabilities, thus enhancing the operational capacity, customer base and economic opportunities for their firms.

Susan added that Afghan women continue to display their entrepreneurial spirit and create businesses despite facing significant challenges. Therefore, the initiative will facilitate creation of viable businesses as well as employment and sources of income generation.

“Afghan women are finding ways to build businesses, despite the many obstacles they face. Expanding access to finance can help women entrepreneurs turn their ideas and skills into stronger businesses, more jobs and greater economic security for their families and communities,” Susan said.