Reaching rural youth through informal models Khalida Bouzar Director, Near East, North Africa and Europe Division International Fund for Agricultural Development (IFAD) September 2013
IFAD’s approach to investments in rural areas • IFAD targets poor rural populations and small-scale farmers, especially in remote areas • IFAD provides loans and grants to governments, and is involved in project design and direct implementation support • Key areas of IFAD’s investments are rural financial services, agricultural development, irrigation, livestock, markets and infrastructure • IFAD is a major supporter of community-designed and community-managed rural development projects and farmer organizations
IFAD’s investment and outreach Since its inception, the Fund has: • Mobilized around USD 21.9 billion in co-financing from domestic sources , in addition to IFAD’s contribution of about USD 14.7 billion in loans and grants, with the current total investment reaching USD 13 billion • Supported 924 programmes and projects in 119 countries, including 267 projects in 98 countries in the current portfolio • Empowered over 400 million people to break out of poverty
IFAD’s current investment portfolio in NEN
Major challenges for rural youth in NENA • High youth unemployment o Unemployment rates among young people in the NENA region are the highest globally, with more than 25% of the region's youth currently unemployed o 85 million additional jobs will be required in the region in the next 10 years just to match the global average unemployment and participation rates • Market deficiencies o Low female participation in the workforce with more then 40 per cent of young women unemployed o Youth are well educated, but economies are not generating enough high skilled jobs - 20% of people with post-secondary degrees in North Africa are unemployed • Access to land and financial services by rural youth o Young people are virtually landless o 13% of people aged 15-24 in the NENA region have accounts at a formal financial institution, as compared to a world average of 37%, and to 17% in the Sub-Saharan Africa
Responding to the major challenges: Two stories from the field • Egypt: West Noubaria Rural Development Project (WNRDP) Key area of IFAD’s investment: access to reclaimed land coupled with access to credit and markets Number of direct beneficiaries: nearly 110 000 youth (22 000 HH) Total financing: USD 54.8 million • Moldova: Rural Financial Services and Agribusiness Development Project (RFSADP) Key area of IFAD’s investment: access to credit coupled with pre- and post-financing support Number of direct beneficiaries: 40 000 (8 000 HH) Total financing: USD 39.3 million
Voices from Egypt: The graduates of the West Noubaria project Please insert the file (Egypt: young and jobless) http://www.youtube.com/watch? v=0D2bIY3fND4
Recorded results of WNRDP The Marketing Operations Support component helped farmers to establish linkages with private-sector exporters and agro- processors through farmer marketing associations (FMAs): o Seven new FMAs were established with a total membership of 12 438 young farmers o Contracts were signed between youth entrepreneurs and 56 different agro-processing companies, including H.J. Heinz o 200 citrus farmers obtained GLOBALGAP and FAIR TRADE certifications, and exported their products to England for the first time in 2013
Voices from Moldova: The story of 30-year old entrepreneur, Vasile Nicolaescu • Business idea: quail farming • How IFAD’s programme supported Vasile’s business idea: o Vasile applied for a loan of USD 24 000 in April 2012 o He provided a business plan, pledging 10 percent from his own resources, including a 200-percent collateral on the borrowed amount o Two months later, he received a 5-year loan through Moldindconbank with a 2-year grace period and 8.5 percent interest rate o 40 percent of the loan was topped up by a grant from DANIDA co-financing • Result: o Initially starting with 20 quails, Vasile now breeds 48 000 quails, has a modern incubator, and can produce 80 kg of quail meat a week and 1 800 quail eggs a day
Recorded results for the Youth Entrepreneurs sub-component of RFSADP After two years of implementation: • 300 youth entrepreneurs (YE) received loans and matching grants • 128 YE entrepreneurs trained in business and entrepreneurship skills • 237 enterprises accessing financial services • 145 enterprises accessing non-financial services
Lessons learned: Reaching rural youth through targeted investments
Lesson #1: Create an enabling environment • Strengthen the capacities of business development service providers to support young entrepreneurs • Establish links between entrepreneurs, business service providers, and youth groups • Ensure integrated support to rural youth including technical training, access to productive assets, and promotion of youth-sensitive institutions
Lesson #2: Facilitate easy access to land to expand income-generating activities • Target youth groups in the identification of innovative mechanisms for gaining access to land • Conduct capacity-building courses for young landowners adapted to their needs • Promote training and technical support to young landowners to expand income-generating activities
Lesson #3: Focus on youth-inclusive services for enterprise development • Provide courses on financial literacy to promote entrepreneurship and enhance credit worthiness of youth • Initiate partnerships with financial institutions to promote financial inclusion through dedicated financial windows for young entrepreneurs and to address access to credit hurdles (e.g. high collateral requirement) • Provide post-financing support to ensure that youth are provided with the necessary mentoring for them to succeed
Grant: Scaling up IFAD rural youth employment interventions in the MENA region Total financing: USD 6.3 million Objective: To increase youth employment and self-employment by building the capacity of local institutions to provide youth-inclusive financial and non- financial services to rural youth or the enterprises that employ them Focus countries: Egypt, Morocco, Tunisia and Yemen Implementing partners: Making Cents International and Silatech Target group: More than 15 000 rural youth receiving financial support services, and 3 750 youth provided with direct employment Expected results: Increased number of youth • with access to services to begin or expand business in 3 years • employed by SMEs • trained on rural enterprise development • receiving loans disbursed and holding deposits
Thank you!
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