The Eastern and Southern African Trade and Development Bank (TDB) has issued a three-year partial risk guarantee facility to support women-led small and medium enterprises (SMEs) in Burundi.

Provided as part of its Trade and Development Fund (TDF), the guarantee, valued at BuFr500mn (US$260,000) will be used by microfinance institution Women’s Initiative for Self-Empowerment (WISE) to borrow approximately US$510,000 in working capital from Banque de Gestion et de Financement (BGF).

The funding unlocked will be on-lent by WISE to women-led businesses operating in the agribusiness and trade sectors. In addition, the TDF guarantee will be blended with a non-repayable technical assistance grant of US$30,000 targeted at strengthening WISE’s corporate governance and supporting staff training on modern SME lending processes.

“Without microfinance institutions like WISE, women-led SMEs in Burundi would remain mostly unbanked,” says Gloria Mamba, director general of the TDF. “By increasing access to capital for WISE and enhancing its corporate governance and digital finance strategy we know the impact will be felt where it is needed the most.”

TDB says that its relations with WISE began around a decade ago, when it extended a US$400,000 guarantee to the microfinance institution to support women microentrepreneurs. With this new facility, as well as on-lending, WISE will roll out new financing products aimed at women, and expand its lending operations to a wider geographical area.

Recent months have seen TDB ramp up its activity in financing women-led businesses across Eastern and Southern Africa. In May last year, it extended a US$10.6mn revolving pre-export structured trade commodity finance facility to EdM, a woman-owned vanilla producer in Madagascar. The transaction, which was selected as a winner in this year’s GTR Best Deal awards, contributed to reducing gender inequality in a country where the majority of women are excluded from the social, economic and political spheres.