Improving Access to Finance for Young Agripreneurs in Africa’s Food Systems

On December 3rd 2024, the Netherlands Food Partnership (NFP) Communities of Practice (CoPs) on Youth Agripreneurship and Food Systems Finance co-hosted an online learning event to address a critical challenge for young agripreneurs: access to finance. Bringing together youth representatives, professionals and financial service providers from the Netherlands and LMICs, the session explored the main challenges for young entrepreneurs to access finance, successful strategies for youth-friendly financing options and collaboration opportunities between financial service providers and youth agripreneurship initiatives and programmes.

Co-organized by CoP members SNV, CABI, and Policy Action Initiative, the webinar responds to priorities identified by the members of the CoP Youth Agripreneurship. Complemented by the CoP Food Systems Finance’s focus on the role of finance in transforming food systems. The event aimed to explore innovative financial models and success stories by youth agripreneurs and financial institutions.

Key takeaways and recommendations for improving access to finance for young agripreneurs

1. Develop youth-focused financial instruments: Financial service providers (FSPs) should create youth-friendly financing options, including alternative collateral mechanisms and developing youth-specific de-risking strategies.

2. Develop tailored approaches for diverse youth groups: Youth are not a homogeneous group; rural and urban youth differ in skills and education needs, while young women face additional barriers due to gender.

3. Increase awareness of financial opportunities: Many young agripreneurs are unaware of where to turn for access to finance. Both NGOs and FSPs can play a crucial role in addressing this gap by actively disclosing and promoting available funding opportunities, as well as providing guidance on how to access them.
   
   

4. Encourage youth engagement in savings and lending groups: Participation in savings and lending groups allows youth to build financial track records, enabling future access to loans from commercial banks.

5. Digitize saving and lending groups: Digitizing youth saving and lending groups can enhance their credibility with financial institutions.
   
   

6. Integrate informal and formal financing models: Linking savings groups to cooperative banks, which in turn can access loans from larger financial institutions, creates a bridge between informal and formal financing systems.

7. Enhance financial literacy: Financial services should be paired with efforts to improve youth financial literacy, including education on financing options, application processes, and business case development. Financial literacy is also a derisking measure in which youth support programmes can partner with financial service providers.
   
   

8. Leverage mentorship: Mentorship programs can guide young agripreneurs in navigating financial systems, including application procedures for loans or grants, improving business skills, and building confidence in securing funding.
   
   

9. Seek multi-stakeholder collaboration: Improving access to finance requires collaboration among financial institutions, civil society organizations (CSOs), and educational entities. Solutions should be context-specific to address rural-urban disparities effectively.

A session report is available for download, offering a more detailed summary of the contributions.