Reaching rural youth through informal models

Khalida BouzarDirector, 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 andsmall-scale farmers, especially in remote areas

• IFAD provides loans and grants to governments, andis involved in project design and direct implementationsupport

• Key areas of IFAD’s investments are rural financialservices, agricultural development, irrigation,livestock, markets and infrastructure

• IFAD is a major supporter of community-designedand community-managed rural development projectsand farmer organizations

IFAD’s investment and outreach

Since its inception, the Fund has:

• Mobilized around USD 21.9 billion in co-financingfrom domestic sources, in addition to IFAD’scontribution of about USD 14.7 billion in loans andgrants, with the current total investment reaching USD13 billion

• Supported 924 programmes and projects in 119countries, including 267 projects in 98 countries inthe current portfolio

• Empowered over 400 million people to break out ofpoverty

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 highestglobally, with more than 25% of the region's youth currently unemployedo 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 womenunemployedo 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 landlesso 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-SaharanAfrica

Responding to the major challenges: Twostories from the field

• Egypt: West Noubaria Rural Development Project (WNRDP)

Key area of IFAD’s investment: access to reclaimed land coupled withaccess to credit and marketsNumber of direct beneficiaries: nearly 110 000 youth (22 000 HH)Total financing: USD 54.8 million

• Moldova: Rural Financial Services and AgribusinessDevelopment Project (RFSADP)

Key area of IFAD’s investment: access to credit coupled with pre- andpost-financing supportNumber of direct beneficiaries: 40 000 (8 000 HH)Total financing: USD 39.3 million

Voices from Egypt: The graduates of the WestNoubaria 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 farmersto establish linkages with private-sector exporters and agro-processors through farmer marketing associations (FMAs):

oSeven new FMAs were established with a total membershipof 12 438 young farmersoContracts were signed between youth entrepreneurs and 56

different agro-processing companies, including H.J. Heinzo200 citrus farmers obtained GLOBALGAP and FAIR TRADE

certifications, and exported their products to England for thefirst time in 2013

Voices from Moldova: The story of 30-year oldentrepreneur, 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 2012o He provided a business plan, pledging 10 percent from his own resources,

including a 200-percent collateral on the borrowed amounto Two months later, he received a 5-year loan through Moldindconbank with a

2-year grace period and 8.5 percent interest rateo 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 800quail eggs a day

Recorded results for the YouthEntrepreneurs sub-component of RFSADPAfter two years of implementation:

• 300 youth entrepreneurs (YE) received loans andmatching grants

• 128 YE entrepreneurs trained in business andentrepreneurship skills

• 237 enterprises accessing financial services• 145 enterprises accessing non-financial services

Lessons learned: Reaching rural youth throughtargeted investments

Lesson #1: Create an enabling environment

• Strengthen the capacities of business developmentservice providers to support young entrepreneurs

• Establish links between entrepreneurs, businessservice providers, and youth groups

• Ensure integrated support to rural youth includingtechnical training, access to productive assets, andpromotion of youth-sensitive institutions

Lesson #2: Facilitate easy access to land toexpand income-generating activities

• Target youth groups in the identification of innovativemechanisms for gaining access to land

• Conduct capacity-building courses for young landownersadapted to their needs

• Promote training and technical support to young landownersto expand income-generating activities

Lesson #3: Focus on youth-inclusive services forenterprise development

• Provide courses on financial literacy to promoteentrepreneurship and enhance credit worthiness ofyouth

• Initiate partnerships with financial institutions to promotefinancial inclusion through dedicated financial windowsfor young entrepreneurs and to address access to credithurdles (e.g. high collateral requirement)

• Provide post-financing support to ensure that youth areprovided with the necessary mentoring for them tosucceed

Grant: Scaling up IFAD rural youth employmentinterventions in the MENA regionTotal financing: USD 6.3 millionObjective: To increase youth employment and self-employment by buildingthe capacity of local institutions to provide youth-inclusive financial and non-financial services to rural youth or the enterprises that employ themFocus countries: Egypt, Morocco, Tunisia and YemenImplementing partners: Making Cents International and SilatechTarget group: More than 15 000 rural youth receiving financial supportservices, and 3 750 youth provided with direct employmentExpected 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!