Credart

Objective of the project
To set up a range of financial and non-financial services for young entrepreneurs.

Areas of intervention
Burkina Faso, Togo, Niger, Rwanda

Project managers

Partners
RCPB, FUCEC, ASUSU, UFC, Rotary Luxembourg


Some key figures:

4,010 young adults have received loans
6,695 jobs created


Portraits

Young entrepreneurs, the future belongs to you!


The aim of the "Young Entrepreneurs" initiative is to establish, with partner MFIs, a range of financial (credit and savings) and non-financial (training, financial education, business management consulting, monitoring and support) services adapted to the needs of young entrepreneurs wishing to start or strengthen their micro-enterprise.


Uptaded: June 2018

Young people: Leveraging economic growth

Sub-Saharan Africa has experienced relatively high growth rates in recent years, but the labour force participation rate has remained stable and below 70% since 1990[1].

One in two Africans aged 15 to 24 still has no professional activity in 2018, or nearly 100 million young people on the continent. For the 11 million young people entering the African labour market each year, there are few job opportunities in either formal or informal enterprises. Self-employment is therefore considered to be one of the main sources of job creation for the coming years[1].

The participation rate is the proportion of the population aged 15 and over which is economically active: All those who provide labour for the production of goods and services during a given period. Source: International Labour Organisation, ILOSTAT database. Data retrieved March 2017.

 

The Young Entrepreneurs Initiative

To meet the challenge of job creation for young people in Sub-Saharan Africa, with the cooperation of 4 partner microfinance institutions (RCBP, ASUSU, FUCEC and most recently UFC) ADA has gradually developed a financial services offering (credit and savings) combined with non-financial services (training, financial education, business management advice, monitoring and support), to optimise the use of the financing obtained. This is what we are calling the Young Entrepreneurs initiative.

 

A dual objective: Economic and social

1. Combating youth unemployment, through entrepreneurship, by facilitating access to financial and non-financial products and services via:
- financial education training
- granting credit on preferential terms to start or strengthen a micro-enterprise
- personalised monitoring through to the end of the loan repayment

2. Contribute to the development of partner microfinance institutions by:
- an increase of their credit portfolio
- customer expansion
- improved social performance

 

Process for establishing services for young entrepreneurs

Services for young entrepreneurs are established in 2 phases:

- The pilot phase: across a sample of the institution’s branches and testing the product on a small scale in order to assess its relevance to the target population and its impact in terms of young people financed and jobs created.

- The outreach phase: if the pilot phase proves conclusive and the MFI has acquired the necessary expertise to implement services for young people, the process switches to the phase of expansion to other branches and possibly other sectors of activity. 
 
A supportive pathway for a young entrepreneur by a partner MFI (animated image)

Un exemple d'accompagnement

  1. The MFI contacts the targeted youth and invites them to pre-training
  2. The young person attends preliminary training on financial education, personal development, entrepreneurship, etc.
  3. The MFI organises an individual interview with the young micro-entrepreneur to validate the eligibility of his or her project
  4. A 2nd training session with the young person, this time focused on his or her business plan, cash management, etc.
  5. The young micro-entrepreneur creates a business plan and assembles the documents needed to prepare the loan application file
  6. The young person submits his or her application to the MFI
  7. A credit file is assembled and analysed by the MFI’s credit agent
  8. The MFI approves the application and makes funding available
  9. The credit agent visits the young person's business to ensure the financing is being used properly
  10. Monitoring of the repayment of the microcredit by a credit agent and support by a coach who is an expert in the relevant trade
  11. ​Young micro-entrepreneurs who have repaid their first loan can apply for a new loan for their business


RCPB in Burkina Faso, the first MFI partner of the “Young Entrepreneurs” project

To facilitate its integration into the working life of young people in Burkina Faso, at the end of 2011 ADA put in place a pilot project called “Créd’art”, which began as part of the MFI leader in the microfinance sector in Burkina Faso, the RCPB (Network of Credit Unions in Burkina Faso). Créd’art consists of savings and loans products designed specifically for the needs of young people. These products are aimed at young people:
- between 18 and 35 years old;
- having learned a trade or undertaken professional training;
- who are in need of funding to establish their project, or;
- have already started their business and require equipment or working capital.

These young Burkinabe entrepreneurs primarily work in the professions of hairdresser, dressmaker, carpenter, bricklayer, jeweller, plumber or electrician.

The product is supplemented by pre-financing training, particularly focused on financial education and entrepreneurship.

Pilot project results
The "Créd'art" pilot project has shown very positive results since its creation at the end of 2011. After several years of testing and evaluation, the RCPB concluded that it is an excellent product for young people, with a positive social impact.

Between 2011 and 2014:
- 1,687 young people were financed and supported in Burkina Faso with a total sum of €1 million;
- 84% of the micro-enterprises financed in 2008-2009 are still active 6 years later;
- Cred’art has enabled the creation of around 2,300 jobs between micro-entrepreneurs, apprentices and employees;
- In 2014, the RCPB decided to extend Cred’art to two new regions of Burkina Faso and to configure new so-called “transition” credit products, enabling young people first funded by Créd’art to gradually move towards the MFI's traditional conditions for financing.

Watch the vidoo on Créd'art


 


Replication of the “Young Entrepreneurs” initiative in Togo and Niger

Following a thorough identification and selection process, in 2014 2 new MFIs were selected in two West African countries: ASUSU in Niger and FUCEC in Togo, for a pilot phase to test financial and non-financial services for young entrepreneurs inspired by the Créd’art experience.

The first loans were granted by FUCEC in Togo at the end of 2015 in the city of Lomé as well as in the centre of the country, and in mid-2016 by ASUSU in Niger, primarily in the city of Niamey.

  • FUCEC in Togo

Pilot project results
After 2 years of the pilot phase in the Lomé, Kpalimé, Anié and Sokodé areas, the results have been satisfactory and in line with the objectives set:
- 2,000 young people received training in financial education and entrepreneurship;
- 950 were funded to create or strengthen their business;
- a total volume disbursed of €640,000;
- 95 of the young people financed in 2016 renewed a 2nd line of credit in 2017 (40% renewal).

The mid-term evaluation carried out by ADA allowed us to demonstrate FUCEC’s good management of services and their positive impact on the target population, traditionally excluded by MFIs.

In January 2018, in order to enable FUCEC to increase the impact of this initiative and achieve the desired level of profitability for this product in order to maintain their offerings of services for young people in a sustainable manner, ADA agreed to renew its technical and financial support through a new project to bring services to young entrepreneurs.

  • ASUSU in Niger

For reasons linked to the Nigerien social context and factors within the MFI, ASUSU found itself in a difficult financial position and was placed under the supervision of the Nigerien authorities at the beginning of 2018.

This situation had an impact on the pilot phase, the results of which remained modest, with around 200 young Nigerian entrepreneurs financed in two years. Under these conditions, it was decided to end the pilot phase, so that ASUSU could focus on priority projects and remedy its situation.


UFC in Rwanda: The 4th MFI partner of the “Young Entrepreneurs” initiative

BUFC au Rwanda

After Burkina Faso, Niger and Togo, the “Young Entrepreneurs” initiative worked with the UFC (Umutanguha Finance Company) to meet the challenge of reaching young people in Rwanda. 

ADA and UFC therefore launched a pilot project called “Support for Young Entrepreneurs in Rwanda” in 2016, the objective of which was to test a method for fostering the professional integration of young craftspeople, by giving them access to appropriate financial and non-financial services enabling them to create or strengthen their own business. This method focused on 5 promising artisanal trades in the region: Hairdressing, sewing, auto repair, joinery and welding.

After 6 months of design and organization of the pilot product, called Artisan Youth Loan (AYL), followed by 12 months of implementation at the Mahoko branch in the north of the country, nearly 60 young people were financed and the results have been generally satisfactory in terms of management by UFC agents, the quality of the loan portfolio and the impact on the target population.

In April 2018, ADA and UFC decided to expand services for young people across the whole MFI, with a target of 3,000 new young people funded and 4,500 jobs created in 3 years.

 


Key figures of the “Young Entrepreneurs” initiative at the end of 2017
 
 Indicators at the end of 2018 Burkina (RCPB)   Togo (FUCEC)  Niger (ASUSU)  

Rwanda  (UFC)  

Young financed 2 800 950 200 60
Start 25% 31% 55% 80%
Jobs created 5 500 860 225 110
PAR 30 7% 7% 45% 5%

 

READ THE TESTIMONIES OF THE YOUNG 
BENEFICIARIES IN RWANDA

 

Portraits

 

Our partners

This story was made possible by the microfinance institution RCPB, which believed in the ability of young people to build and manage their own micro-enterprise. ADA has been working with CIF and RCPB since 2008 to build and develop Créd’art in Burkina Faso.

Thanks also to the two MFIs who joined the project in 2015, FUCEC and ASUSU, who also received support from LuxDev.

Finally, thanks to UFC in Rwanda, who joined us in 2016.

The Young Entrepreneurs has been supported by Rotary Luxembourg since 2015.

 

 

Partenaires projet jeunes entrepreneurs
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