As more youth enter the workforce, they are facing increasing difficulty in procuring employment. The traditional sources of opportunity, governments and large corporations, in general are not hiring at the same levels, if at all. As such, entrepreneurship is seen an important option for creating sustainable livelihoods for this segment of the population. Young entrepreneurs (those under the age of 30) face special challenges that set them apart from other entrepreneurs, most notably in relation to financing. While all SMEs in general face difficulties in procuring financing, young entrepreneurs struggle even more to do so. They have had less time to develop their financial identity (or credit score), less opportunity to amass assets/collateral, less chance to build a business track record and experience, and they are less likely to have strong networks. As such, they are typically considered to be riskier investments, and many financial institutions shun this market. Furthermore, young entrepreneurs require more than just financial support: they also require mentoring, network support and business support.
For these reasons, the G20’s Global Partnership for Financial Inclusion has asked the SME Finance Forum and Child and Youth Finance International (another GPFI implementing partner) to carry out a global stocktaking of successful work on financing young entrepreneurs.
Our stock-taking activity seeks to identify good practices in supporting this challenging SME market segment, and to highlight lessons which may be offered to others who are interested in serving them. We are reaching out to SME Finance Forum members and beyondto obtain case studies of successful experiences, which we will then compile, and from which we will seek to extract lessons of good practice.
Looking forward to hearing back from as many of you as possible! In particular, we’d like to hear from every one of you who has experience in successful financing of young entrepreneurs which might be shared.
Please email us smefinanceforum@ifc.org by September 11, 2017.
