> Posted by Eric Zuehlke, Web and Communications Director, CFI
It’s a big couple of weeks for Africa here in Washington, D.C. On Monday, President Obama hosted a town hall meeting to welcome this year’s class of the Young African Leaders Initiative (YALI). Launched in 2010 by Obama, YALI supports young African leaders as they spur economic growth and prosperity, strengthen democratic governance, and enhance peace and security across Africa. These Fellows spend six weeks at one of 20 U.S. universities and colleges undergoing leadership training and mentoring in business and entrepreneurship, civic engagement, and public administration. Next week, the State Department will host the U.S.-Africa Leaders Summit with heads of state from 50 African countries to advance the U.S. Administration’s focus on trade and investment in Africa and discuss security and democratic development.
Nearly one-third of all Africans are between the ages of 10 and 24, and approximately 60 percent are below 35. YALI is tapping into the drive and energy of Africa’s youth to effect change. Many Fellows in the YALI network are focused on improving access to financial services, whether it’s encouraging a savings culture in Zimbabwe, establishing microfinance programs for women and youth in Kenya, or creating a microfinance program to help start medical supply stores in Kinshasa, Democratic Republic of Congo.
Financing for small and medium-sized enterprises (SME) is receiving quite a bit of attention in U.S.-Africa relations. In his remarks to the Young African leaders, Obama highlighted the need for SME financing in Africa. “You shouldn’t have to be the son or daughter of somebody [special]. If you’ve got a good idea, you should be able to test your idea and be judged on your own merits,” he said. Obama noted that he has been struck during his multiple trips to Africa that young people are less interested in aid and more interested in creating opportunity through business and entrepreneurship at the local level. A main focus of next week’s summit will be on how to make sure financing is available to entrepreneurs. Financing isn’t enough, however. Obama mentioned that he wants financing to be supplemented with training and networking though programs like YALI.
Indeed, access to finance and capital has been a major impediment to SME growth in Africa. According to Accelerating Entrepreneurship in Africa, a 2012 report from the Omidyar Network, up to 84 percent of SMEs in Africa are either un-served or underserved, representing a value gap in credit financing of $140-170 billion. Self financing and family loans are the main sources of funding.
For more, watch President Obama’s town hall with this year’s YALI class. (Skip to the video’s time mark of 18:35 for a discussion on financing for SMEs.)
Have you read?