African Development Bank (AfDB) and the African Guarantee Fund (AGF) have pledged to mobilise $5 billion in financing for African women businesses by 2026.

The Chief Executive Officer of AGF, Jules Ngankam, disclosed this during the 5th Edition of Affirmative Finance Action for Women in Africa (AFAWA) Finance Series in Lagos.

He explained that AFAWA is geared towards increasing women's access to finance in the continent, in a bid to reduce the $42 billion financing gap for women-led small and medium scale enterprises.

He also hinted that the Fund will cover 75 percent risk of loans provided by commercial banks to women entrepreneurs in Africa.

"Our goal is to mobilise $5 billion in financing for African women businesses by 2026.

"Traditionally, we cover 50 per cent of the risk because we still want the bank to have your skin in the game. But with this follow up programme, we cover 75% of the risk meaning every time a bank lends to an SME owner led by women, your exposure is only 25% of the amount of the loan in case that SME default, ADF is covering 75%," he said.

Minister of Finance, Wale Edun, represented by the ministry's Director, Economic Research and Policy Management Department, Grace Ogbonna, urged women to form cooperatives to ease their access to loans from development banks.