The African Development Bank Will Develop Investment Banks For African Youthful Entrepreneurs

Akinwumi Adesina, President of the African Development Bank (AfDB), announced on Wednesday that the multilateral lender would soon establish investment banks for young entrepreneurs on the continent.

Speaking at the Commonwealth Business Forum in Kigali, Rwanda, Adesina questioned the structure of the continent’s existing commercial banks.

He claimed that Africa’s present financial institution model was not built to benefit youth and that if 21-year-olds tried to receive loans from banks, they would demand 40 years of tax receipts in order to dissuade them from seeking financial assistance.

The AfDB president emphasized that the Youth Entrepreneurship Investment Banks would focus on the entire business lifecycle, including credit and equity backing.

“Our financial institutions are not set up for young people; we have a missing market to serve them,” Adesina added. We have a population of 455 million people, which is expected to grow to 845 million by 2050. As a result, we must build a new financial ecosystem centered on young people.

“That is why, at the African Development Bank, we have decided to establish what will be known as Youth Entrepreneurship Investment Banks.” They will be new financial institutions that will build support networks around young people’s enterprises.

“Today, you go to a bank and try to get money; they ask how old you are; you say 21, and they tell you to bring your tax receipts for the last 40 years; what does that really mean?”

“However, Youth Entrepreneurship Investment Banks will finance young people’s businesses in a lifecycle model, using various instruments ranging from technical assistance to debt (and) equity financing to help them grow their businesses.”

“The point I’m trying to make is that for the future that we discussed at the start of this panel to happen, we need to create new financial institutions that can create youth-based wealth.”

“That is what we are concentrating on. And, by the way, those institutions are currently being designed and will be ready by the end of this month.”

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