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
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
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