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From unemployed to entrepreneur: helping Arab youth in rural areas take control of their futures

29 July 2015

In the Near East and North Africa region, seventeen million young people – more than 20 per cent of the population – are without work. This rate is higher than any other region in the world.

Young people living in rural areas are impacted by high rates of poverty in particular, and young people are continuing to migrate from rural areas and agricultural work so that they can find work in bigger cities.

With two thirds of the region's population under the age of 30, the numbers will keep increasing. In fact, it is estimated that 40 million new jobs will be needed in the next decade to accommodate entrants to the job market.

But where will these jobs come from?

"Entrepreneurship is the key," says Abdelkarim Sma, IFAD's Regional Economist.

With few job opportunities available, many young people in the region have already become entrepreneurs out of necessity. Yet as they try to create their own opportunities, they face another problem. Young people in this region have few possibilities to access affordable financial services. Without funds or financial education they will continue to have the odds stacked against them.

Connecting rural young people with financial and business advisory services

To help solve these barriers, IFAD is combining its expertise in rural development with two social enterprises that specialise in entrepreneurship. Making Cents International and Silatech both focus on developing economic and employment opportunities, with the latter focusing specifically on Arab youth. The three organizations are pooling their collective know-how through IFAD's Rural Youth Economic Empowerment Programme (RYEEP), which aims to help 18,000 rural young people aged 15 to 35 to create employment opportunities.

In order to do this, Smasays that it is essential for rural young people to be able to access financial services, and good quality business and employment training.

"These service gaps are particularly severe for youth due to financial service providers' common perception that they are riskier and therefore more expensive to serve," says Sma.

He notes that although the challenges are big, the benefits of success are even bigger. 

With the right financial and business advisory services specifically tailored for their needs, young people will be able to create their own employment opportunities and improve agricultural productivity in their areas.

Without such opportunities, young people will continue to migrate from rural areas and from agriculture, which would have major implication for both food security and political stability.

Launching innovative initiatives across the region

RYEEP is now testing out different initiatives in four pilot countries in Tunisia, Eygpt, Yemen and Morocco to see what methods and approaches have the potential to be expanded and replicated across the region.

  • In Tunisia, a mobile phone application will help young rural shopkeepers create a transaction and credit history that can be used to access trade finance from suppliers.
  • In Egypt, informal savings groups - already popular throughout the region - will be modified to meet the needs of rural young people and will be combined with non-financial services, such as business management training.
  • In Yemen, financial services aimed at urban youth will be modified for the rural market and will be combined with trainings in entrepreneurship and financial literacy.
  • And in Morocco, the partnering bank will work with micro-finance institutions to enable qualified rural youth to access formal lending options.

Only one year into the programme, there are already some notable successes. In rural areas of Egypt, for example, almost 8,000 young people have joined the newly launched youth savings groups, through which they are coached in entrepreneurship and financial management.