Within the framework of the 2015 Africa Agriculture Status Report developed by the Alliance for a Green Revolution in Africa (AGRA) in collaboration with partners including CTA, which focused on “Youth in agriculture in sub-Saharan Africa”, CTA contributed two chapters on: “Innovative and Inclusive Finance for Youth in Agriculture” and “ICT and Youth in Agriculture” to the report.

The chapter on “Innovative and inclusive finance for youth in agriculture” focused on analysing youth access to credit, savings, insurance or other forms of financing to promote their entrepreneurship drive.

It starts with a brief review of the challenges preventing young agripreneurs from accessing needed finance. It went further to assess the current state of financing available to youth in agriculture, observing that financing youth in agriculture is already happening.

Besides, where African youth have had this financing opportunity, they have found innovative and creative strategies to secure a future for themselves while contributing to the development of the private sector and social stability in their countries. However, because young people often have fewer assets to use as collaterals, there is still a considerable gap in their access finance especially through formal institutions, thus financing of youth in agriculture needs to be scaled up.

Authors summarized their analyses and recommendations into five key points indicated below:

  • Links between young entrepreneurs in agriculture and formal financial institutions need to be strengthened by improving youth’s financial literacy and the capability of institutions to assess agricultural sector opportunities.
  • Better metrics can drive better policy – African governments should produce and share reliable statistics on youth employment in agriculture and their financial inclusion.
  • Young agripreneurs, having fewer assets, will benefit from forms of finance that do not require fixed collateral, such as contract farming, leasing, warehouse receipt finance or factoring. Governments and international development organizations should encourage such forms of finance through blending and guarantee schemes.
  • Crowdfunding platforms offer opportunities to young African entrepreneurs, including in agriculture, and governments should remove all barriers that prevent them from operating properly, including for equity and loan financing.
  • A scarcity of venture capital firms (including the mentoring services that they provide) hampers African young entrepreneurs, including in agriculture, in developing and scaling up their businesses. Development organizations should continue to scale up their support for challenge funds and impact investing to fill this critical gap in the market.

Leveraging on these recommendations can help governments and development organisations working with young people in agriculture to facilitate increased youth engagement in agriculture and unleash their entrepreneurship drive.

Authors of the Chapter:
Lamon Rutten and Sehomi Landry Fanou

Download the chapter here

This post was originally published at Youth ICT Agriculture CTA Ardyis website and has been republished with permission.

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