recommendations 1. 2. 4. 3. Global Stocktaking Case Studies 1. - PowerPoint PPT Presentation

UNLEASHING YOUTH: IMPROVING ACCESS TO FINANCE FOR YOUNG ENTREPRENEURS Evidence from a Global Stocktaking Patteera (Mae) Chaladmanakul, Susannah Horton, Ammar Khalid & Helena Molina

1. 2. 3. 4. 1. SAIS + SME Finance forum BACKGROUND 2. Global stocktaking case studies 3. Good practices & policy recommendations

1. 2. 4. 3. Global Stocktaking Case Studies

1. 2. 4. 3. Global Stocktaking Case Studies - geography LEGEND: Commercial Bank MFI Accelerator FinTech Investment Company Consulting International Organization NGO Government

Activity: providing access to finance for 2 young entrepreneurs ALEX • • 26 years old Urban Philippines • • College-educated SMEs comprise 99.6% of all businesses in the country but account for little GDP growth • Textile social enterprise co-founder • 105/189 in WB Doing Business report • Won grant from business incubator • Securing licenses to start a business is large • Business has a storefront financial and time burden • Failed to qualify for state-bank loan • Per-urban Ethiopia • 29 years old • High gender inequality • History of unemployment (107/112 Economist  wants to start a small Women Econ. Opp. Index) salon • Commercial banks: high • Informal skills training min. loan sizes and (worked at a salon for last 3 excessive collateral reqs. years) • MFIs: group lending and • No source of collateral micro-firm loans, max loan sizes are too small DANI

1. 2. 3. 4. 1. Financial services FINDINGS 2. Non-financial services 3. Policy recommendations

1. 2. 4. 3. 1. Early-stage market research 2. Flexible criteria for assessing youth FINANCIAL SERVICES 3. Tranched financing 4. Customized products 5. FinTech innovations

1. 2. 4. 3. Early-Stage Market Research • Deeper understanding of needs and preferences • Diverse methods and stakeholders • Partnering with third parties can mitigate high cost

1. 2. 4. 3. Flexible Criteria • Enterprising tendencies & business acumen • Personality, behavioral, psychometric tests

1. 2. 4. 3. Tranched Financing Business performance achievements Building financial track record Skill acquisition

1. 2. 4. 3. Customized Products Zero or alternative Match payment schedule to Develop products to have cash flows flexible or reduced interest collateral rates Image Sources: (1) http://www.takepart.com/article/2015/08/05/hello-tractor/ (2) https://www.businessnews.com.ph/how-to-start-a-sari-sari-store-even-with-a-small-capital-20151022/ (3) http://ifad-un.blogspot.com/2015/02/close-up-on-young-rural-peoples.html

1. 2. 4. 3. FinTech: Financial + Technology Cut costs Improve product quality Overcome geographical constraints Devise more accurate financial risk assessment

1. 2. 3. 4. 1. Mentoring 2. Entrepreneurship education and NON- FINANCIAL training SERVICES 3. Coordinating closely with financial services

1. 2. 4. 3. Mentoring • Provide sustained mentoring • Leverage existing networks • Use local champions or industry experts

1. 2. 4. 3. Entrepreneurship Education Financial Literacy & Business Training Adapt education to stage of Ensure context-specific training fund disbursement

1. 2. 4. 3. Coordinating with financial services • Partnerships help overcome institutional capacity constraints • Linked partnerships

1. 2. 4. 3. Policy Recommendations Amend financial regulations Finance young entrepreneurs directly or by incentivizing the private sector

1. 2. 4. 3. Policy Recommendations Foster an entrepreneurship ecosystem in the economy Ensure better data collection and dissemination of age- disaggregated data Improve digital infrastructure to facilitate young entrepreneurs access to finance

1. 2. 4. 3. ADAPT INTEGRATE FACILITATE Financial Products Non-Financial Products At the Policy-Level

QUESTIONS