July 2017

SDG Lab: sustainable solutions for poverty reduction and community health in Africa

July 6 and 7, 2017, Luxembourg

At a time when public health in many African countries is under threat, the PEARL Institute for Research on Socioeconomic Inequality at the University of Luxembourg, in collaboration with ADA Microfinance Luxembourg, is organizing a Sustainable Development Goal (SDG) Lab on July 6 and 7, 2017, in Luxembourg. This working group aims to collaboratively develop innovative solutions to complex challenges in sustainable development in the areas of microfinance and community health in Africa.

In search of sustainable solutions
In the context of a health crisis characterized by poor water quality and vector-borne diseases (malaria etc.), many young adults and professionals from the poorest African countries are seeking innovative economic solutions to develop their own businesses. Lack of clean drinking water and unimproved sanitation facilities put communities in dire need of finding sustainable solutions to improve community health.

The “Young Entrepreneurs” initiative
The “Young Entrepreneurs” initiative, set up by ADA, proposes a pilot economic innovation to respond to these problems. Thanks to the support of Microfinance Institution partners, this initiative has developped a range of financial services (loans, savings) and non-financial services (training, support) adapted to the needs of young entrepreneurs who wish to set up a project in Niger, Togo or in Rwanda. How can the sustainability of this initiative be ensured?

SDG Lab in response to the development of young entrepreneurs
On July 6 and 7, 2017, the PEARL Institute and ADA Luxembourg are organizing SDG Lab, a two-day social innovation workshop, to support the “Young Entrepreneurs” initiative. The workshop will provide concrete solutions to meet the sustainable development goals of poverty reduction and the provision of drinking water and sanitation for local populations.

A dual sustainable objective
The first objective of the SDG Lab workshop will be to ensure the sustainability of the “Young Entrepreneurs” initiative with the support of microfinance experts on the first day of the workshop.
The second objective will be to extend the initiative, in order to improve access to drinking water. Water experts will therefore gather on the second day of the workshop to explore the issues related to drinking water. They will then engage in discussion to propose innovative.

SDG Lab among the top 10 selected workshops
Future Earth and Stockholm Resilience Centre have recently called for applications to sponsor ten labs worldwide. The SDG Lab proposal was among the ten selected labs that will receive funding, out of a total of 331 applications.

The results of the workshop
ADA is convinced that SDG Lab will contribute to the search for solutions to reduce poverty and allow access to drinking water in Africa.
​The results will be presented to the participants at 4.00 p.m. at the end of the workshop, but also during several major events (Resilience 2017 Conference Stockholm, African Microfinance Week in Addis Ababa, Ethiopia, from 9th to 13th October 2017, Francophonie Parlementaire Conference). The results will also ultimately feed into the UN High-Level Political Forum 2018 on sustainable societies.

Participation in the workshop is reserved for experts, invited for the occasion by ADA and the University of Luxembourg.

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More information on SDG Lab : http://bit.ly/2nbb52u
You can also find the project’s description soon on futureearth.org

February 2017

Youth Africa Works Summit 2017

Context

A summit on African Youth was held in Kigali on 16 and 17 February. The event was organized by the MasterCard Foundation. The foundation today is a major player in the promotion of youth on the African continent. Since 2010, it has committed more than $ 400 million to 37 projects across 19 countries.

For the occasion, more than 300 key players involved in the promotion of youth in Rwanda and neighboring countries were invited, including policy-makers, researchers, NGOs, MFIs, the private sector and a delegation of 50 young farmers -entrepreneurs and students in the subregion.

ADA, which has been promoting initiatives for young entrepreneurs in Africa with its local partners since 2009 in four target countries including Rwanda, was also invited.

Main issues

60% of the African population is under the age of 24, and 11 millions of young people enter the labor market each year. Absorbing this workforce is one of the most important social and economic challenges that the continent is facing. While cities are overcrowded and offer few formal jobs, the agricultural sector represents the best opportunity to offer young people decent jobs and ensure the development of the future populations.

In order to create more opportunities for young people, however, the agricultural sector must change from subsistence agriculture to a modernized commercial agriculture.

Lindiwe Majele Sibanda, Director General of the Network for the Analysis of Food, Agriculture and Natural Resources Policies (FANRPAN), underlines on this issue that "agricultural transformation must be based on three main axes: skills, attitude and access to land and capital ".

The various panelists have tried to set the conditions for a real agricultural transformation and to answer the question: How to achieve this systemic agricultural transformation? Key non-exhaustive answers were:

• Systematically involve young people in the definition of policies to support agriculture
• Implement policies based on tangible evidence, based on experiences in other countries
• Involve private sector actors to increase investment in the agricultural sector
• Strengthen the capacity of MFIs to better understand and manage risks specific to agricultural activities
• Invest in new technologies to improve both financing channels and agri-entrepreneurs' production methods

Prospects and challenges for the professional integration of young people in Africa

To achieve the creation of new jobs, efforts aimed at agricultural transformation should not be limited to the strengthening of agricultural production. Economist David Tschirley explains that all activities related to the transportation, processing and marketing of production have a much greater potential for job creation than production itself. All the more so as demand from African households for processed agricultural commodities is increasing in both urban and rural areas.

In the future, governments, donors and the private sector must concentrate on the value chain as a whole. Such an approach would inevitably increase the outlets for agricultural production and substitute a proportion of imports by local products.

New technologies are also a major issue in agricultural processing. On one hand, they are a mean of increasing the productivity of farms and reducing the hardship of work, but also of anticipating and managing the effects of climate change. On the other hand, new technologies can improve the reputation of the agricultural professions and encourage more young rural people to consider agricultural and processing activities as modern and profitable enterprises.

An interesting approach to support young farmers

One Acre Fund is an NGO located in remote rural areas of East Africa. It has developed a service that provides access to an "integral" package that encompasses all the needs of small farmers:

The service provided to the farmer allows him to reduce the risks associated with lack of input, misuse, loss at harvest and maximize yields with the means at his disposal.

The model developed by One Acre Fund opens up interesting avenues for financing young farmers.

January 2017

ADA develops the "Young Entrepreneurs" project in Rwanda

“With ADA, we reflect together!” 

When ADA launches a project in a new country, there is always an extended phase of consultation with the partner upstream. This was the case with the ‘Young entrepreneurs’ project which, after Burkina Faso, Niger and Togo, is now being rolled out in Rwanda.

Across from the largest bus station in Kigali, you will find the Nyabugogo UFC branch, one of the city’s two branches of the Umutanguha Finance Company (UFC), ADA’s inclusive finance partner in Rwanda. The branch opened in the capital in 2015 and now has 1,200 customers, 89% of whom are women, and provides finance for 138 entrepreneurs, 38% of whom are women and 46% young people aged under 30. The institution's vitality and its stated commitment to helping young people make it an ideal partner for the ‘Young entrepreneurs’ project in Rwanda.

“Our ambition is to be unique, competitive and to hold up our reputation on the market, while fulfilling our social vocation” says CEO Jules Ndahayo. Founded in 2003, UFC is first and foremost a savings and lending cooperative, whose vocation is to help widows and orphans. In Kinyarwanda, the local language, Umutanguha  (the U in UFC) means ‘the friend who never deceives’, a fitting name for a cooperative that has now expanded its activity to cover the whole country (apart from the east). At the end of 2016, UFC had 10 branches, 60 employees (40% of who are women), savings deposits of €2.4 million and a loan portfolio of €4 million.

On the ‘Young entrepreneurs’ project, “We are working collaboratively with ADA,” indicates Jules Ndahayo. “We reflect together and we build together, working towards the same goals.”  The CEO also naturally describes ADA’s international experience as a plus point. ADA is in fact developing a project inspired by Cred-Art, an initiative launched in Burkina Faso in 2009. The experience later garnered with ASUSU (Niger) and FUCEC (Togo) reinforced ADA’s expertise in the field of finance and support for young craftspeople.

Hence UFC contributes its local experience of the Rwandan context while ADA provides technical assistance based on its experience from past project - not only their successes but also their difficulties and indeed failures. “You would have to pay an international firm a considerable amount to benefit from this kind of experience,” says Jules Ndahayo The ‘Young entrepreneurs’ project is being tested in the Mahoko branch near the Congo border and aims to fund the businesses of young Rwandans in five craft sectors enjoying growth in the region (hair dressing, dress making, mechanics, joinery and welding). In the long term, the project will be gradually rolled out in all UGC branches.

March 2016

The Young Entrepreneurs project produces excellent results in Togo!

We have seen extremely positive results since the first microcredits were disbursed in mid-December 2015 by FUCEC, the partner MFI in Togo. The figures below are a perfect illustration of this highly promising start!

At the end of February 2016, FUCEC had financed 115 young Togolese for an amount of 44,420,900 CFA (67,719 EUR), seven of whom received two credits: one for their activity’s working capital and one for investment. This adds up to a total of 122 disbursed credits.

Twenty four of these young clients have been financed in order to help them to start up their activity, for a total of 11,353,900 CFA (approximately 17,310 EUR).  Start-up in this context refers specifically to the financing of both equipment and working capital.
Furthermore, 33,067,000 CFA (50,410 EUR) have been disbursed to 91 young people who have been able to use this money to boost their activity. Sixty six of these credits have been used to purchase equipment (24,513.000 CFA – 37,370 EUR) and 32 credits have been used to bolster working capital (8,554,000 CFA – 13,040 EUR).  Almost half (46%) of the young Togolese who have received funding live in Lomé, the capital of Togo. A further important fact concerns gender equality in terms of access to the credit, since more than half (52%) of the young people financed by the project are women!

I WANT TO HELP, I MAKE A DONATION TO SUPPORT THE PROJECT

January 2016

€235,000 to get young entrepreneurs in Niger working

To facilitate access to credit for young Africans, LuxDev and ADA are collaborating in this context for a total amount of €200,000, initially capitalised at €35,000 by the Rotary "Espoir 2005", to help young artisans via the Nigerien microfinance institution ASUSU.

Replication of the Créd'art project

Since 2008, ADA has run the project "Initiative Jeunes Afrique - Créd’art", Jeunes Entrepreneurs Afrique to help young unemployed Africans, with the aim of giving young artisans a helping hand to set up their own business. It provides financial and non-financial services, comprising a microcredit, financial education and business management training, and tailor-made support until repayment intended to fund activities to kick-start their projects. Originally created in Burkina Faso with the microfinance institution RCPB, the Réseau des Caisses Populaires du Burkina, and the CIF network, Confédération des Institutions Financières de l’Afrique de l’Ouest, the project has already helped to finance more than 1,500 young people in Burkina Faso and create 2,300 jobs.

ADA, with the financial support of the Rotary "Espoir 2005", has decided to extend this experience to two other African countries: in Togo, with the MFI (microfinance institution) partner FUCEC, and in Niger, with the MFI ASUSU. It is in the framework of this latest partnership that the Luxembourg Agency for Development Cooperation, LuxDev, has allocated €200,000 to ADA to supply this fund and partially cover the risk of unpaid bills for young graduates. It is therefore in the framework of this collaboration with ADA, and more specifically through the support mechanisms that will be put in place, that this guarantee fund can be an economic lever facilitating the obtaining of start-up loans intended for young graduates who have begun viable economic projects.

To complete this project, ADA will also arrange technical support to help young people set up their microenterprises. The objective for 2016 is to fund 550 young people, including 250 leavers of training centres supported by LuxDev.
Ranked as the least developed country according to the global human development index chain and with a poverty rate of 46.3%, Niger is particularly in need of assistance from developed countries. It is also one of the six preferred partner countries of the Luxembourg Development Cooperation on the African continent.