Objectives
Supporting young entrepreneurs in the South to access financing and build their capacities
Countries of intervention
- Africa: Togo, Rwanda, South Africa, Burkina, Mali, Senegal
- Latin America: El Salvador, Guatemala, Niacaragua
Project managers
- Africa:
- Latin America:
Key figures
11 initiatives launched between 2018 and 2019
Supporting young entrepreneurs
ADA supports young entrepreneurs between the ages of 18 and 35 in terms of job creation, economic development and resilience within local communities. Through the various projects it has developed up to date, ADA has learnt lessons in order to offer solutions that are increasingly adapted to the needs of young entrepreneurs. These new projects will continue in West Africa and Central America, two regions where the needs are great.
Building on the background
In order to meet the challenge of job creation for young people in Sub-Saharan Africa, ADA has gradually established partnerships with microfinance institutions since 2011, in order to offer young entrepreneurs financial services (credit and savings) coupled with non-financial services (training, financial education, business management consulting, follow-up and support), making it possible to optimise the use of the financing obtained. This is what ADA called the "Young Entrepreneurs" initiative. Thus, 4 projects were successively carried out in:
- Burkina Faso (RPCB)
- Niger (ASUSU)
- Togo (FUCEC)
- Rwanda (UFC)
In addition, since 2018, ADA has initiated an innovative strategy to support the economic and financial inclusion of young entrepreneurs, through a global approach "Market - Technical Support - Financing" based on a complementarity of actors specialized such as incubators, catalysts or funders. ADA's support aims to strengthen these actors who have a direct impact on young people. Starting in 2018, ADA has launched the first projects in the regions of West Africa (Senegal, Mali, Burkina Faso) and Central America (El Salvador, Honduras).
New initiatives for the financial inclusion of young entrepreneurs
Young entrepreneurs (18-35 years old) represent a significant employment pool. A large majority of them need funding of between €100 and €100,000 to develop their business, access the market and attract investors. However, since banks target large companies and microfinance institutions (MFIs) finance microentrepreneurs, these young entrepreneurs, who are somewhere in between, are often neglected, particularly because of the risk they represent. They are called the "missing middle". ADA has started a specific programme called the "Young Entrepreneurs Sustainable (YES) Funding Initiative" to fill this gap and facilitate market access for these young entrepreneurs that it has not supported elsewhere for many years now through microfinance.
1. Support for young entrepreneurs through microfinance (need for financing between €100 and €10 000)
To support these young people, ADA will continue in 2020 to help microfinance institutions to set up systems offering financial services coupled with training and advice in business management.
- In Africa:
- in Togo with FUCEC
- in Rwanda with UFC
- in Senegal, in the framework of a project with LuxDev
- in South Africa with SEF
- In Latin America:
- in El Salvador with Credicampo, through the Alterna incubator (Guatemala)
- in Guatemala with FUNDEA, also through the Alterna incubator (Guatemala)
2. Support for young entrepreneurs through the YES Funding Initiative (financing need of between €10,000 and €100,000)
The Young Entrepreneur Sustainable Funding Initiative is a progressive co-financing mechanism provided by financial institutions and/or private investors or business angels, combined with technical support provided by pre- and post-investment incubators/accelerators. Several pilots in West Africa and Central America will be launched during the year 2020:
- In West Africa:
- In Burkina Faso, with the Sira Labs and La fabrique incubators.
- in Mali and Senegal, with the incubator Donilab
- In Central America:
- in Guatemala, with the incubator Alterna
- in El Salvador, with the incubator Yawal
- in Nicaragua, with the incubator ImpactHub