Youth Finance

The Mastercard Foundation in partnership with BFA released Digital Commerce and Youth Employment in Africa, new research that shows 80 million young people will benefit from the rise of digital commerce in Africa by 2030. These findings indicate that the digital commerce sector has the potential of disrupting the future of work on the continent.

Ammar Khalid, Helena Molina, Susannah Horton, and Patteera Mae Chaladmanakul are second-year International Development students who recently traveled to the Philippines, to gain a deeper knowledge of possible financing models for youth entrepreneurs. Throughout the year, the team conducted a global stocktaking on successful models for financing young entrepreneurs. The forthcoming report will be published jointly by the IFC's SME Finance Forum and the G20 Global Partnership for Financial Inclusion. 

SME Finance Forum member Development Bank of Nigeria is working to aid in providing finance to MSMEs. Calling it a "nightmare," its Managing Director/Chief Executive Officer, Tony Okpanachi, was appointed in 2017 with the mission to alleviate the financing constraints faced by MSMEs and small corporates in Nigeria. The Sun says his job remains to provide financing, partial credit guarantees and technical assistance to eligible financial intermediaries on a market-conforming and fully financially sustainable basis. 

For years, traditional banks shied away from serving many Africans because of the costs of physical branch expansion and the risks associated with serving low-income people. Small entrepreneurs found it particularly hard to access credit as they often lack the required collateral or credit history. But the launch and growth of digital financial services across the continent is changing that situation. This IFC Impact article profiles how mobile money offers Africans a financial future.

Financing SMEs and Entrepreneurs 2018 contributes to filling the knowledge gap in SME finance trends and conditions. This annual OECD publication provides information on debt, equity, asset-based finance, and conditions for SME and entrepreneurship finance, complemented by an overview of recent policy measures to support access to finance. By providing a solid evidence base, the report supports governments in their actions to foster SME access to finance and encourages a culture of policy evaluation.

More than 40 percent of African entrepreneurs cite access to finance as the major factor limiting their growth, according to World Bank Enterprise Surveys. In this article, the author says that West African start-ups and innovative young SMEs are indeed facing the classic ‘valley of death’ — the space between where the entrepreneur’s own resources from family and friends (“love money”) gets depleted and when the company is financially viable enough to attract later-stage investment and financing available on the market.