Samba Bah and Boubacar Bah are members of an agricultural producers’ cooperative in the West African nation of Guinea. Like hundreds of young farmers in the region, the duo need funding to develop income-generating agricultural activities but don't have many financing options.

Financial institutions also view young people engaging in informal activities, such as farming, as ‘risky clients.’ Without access to appropriate financing, in particular credit, Boubacar and Samba have little hope of using their skills to earn a living from agriculture. They also remain financially excluded, hindering economic participation and their ability to contribute to Guinea’s development.

Access to affordable and appropriate financial services in Sub-Saharan Africa is vital for the inclusive development of economies for young people and women in rural areas. However, only 23.5 percent of Guinea’s population had access to financial services in 2017, according to the FINDEX survey. This access is even more difficult in rural areas. Young people in particular lack knowledge about financial services and as a result distrust them altogether, the survey found.

The INTEGRA programme, funded by the European Union and implemented jointly by ENABEL, UNDP and UNCDF, offers economic integration pathways for more than 8,000 young people in Guinea. UNCDF, specifically, works to ensure improved access to financial services (savings, credit) and financial education to the same target group.

Innovative products adapted for young people

This work is based on the human-centered product development approach, aiming to better understand the needs, limitations, skills and desires of young people. UNCDF thus trained a financial partner, Finadev, to apply this method and supported the implementation of the study and the design of financial products and services adapted to the needs of young people.

During the integration process, current and savings accounts, free of opening and maintenance fees, were made available to young people. They also attended ten financial education sessions conducted through digital media and translated into local languages (Sousou, Poular and Malinké). These sessions allowed young people to understand the benefits of and put into practice a savings plan.

The training provided by Finadev gradually helped change and influence the image young people had of the financial sector, breaking down one main barrier to accessing financial services. The training also enabled young people to become more aware of their own financing needs and discuss them directly with bank advisers and microfinance institutions (MFIs).

The combined action of connecting young people with MFIs, teaching them how to save money through proper planning and financial education reduces the risks of lending to them.

This reduction allowed Finadev to lend at reduced interest rates, with conditions limited to a simple moral guarantee. A moral guarantee refers to simple promises made by a debtor to do or refrain from doing something as a condition of receiving a loan.

To date, nearly 50 projects have been funded for young beneficiaries of the INTEGRA programme – an indication that the training and education initiatives have been a success.

From education and training to impact

Thanks to the training and advice of Finadev agents, Samba Bah and Boubacar Bah, were able to access credit to expand their potato and eggplant farms. The funding granted to them is tailored to the culture cycle and their repayment capacity, and is an example of an innovative financial solution. After harvesting, the duo were able to repay the loan and receive the fruits of their labor with the sale of their crops.

Access to this funding will have a lasting impact on Boubacar and members of his agricultural cooperative. Some of the members will continue using the savings and loan services to finance their future crop or make joint investments within their cooperative. Other members plan to save for a new vehicle, as well as diversify and expand their businesses. With the option of accessing Finadev accounts via Orange Money, funded under the INTEGRA programme, young people can more easily manage their payments and money, even in rural areas. This promotes financial inclusion of these young people and contributes to their lasting integration into the local and national economy.

Based on the successes of the INTEGRA programme, Finadev is extending the use of financial education to its own clients and intends to offer a specific range of services for young Guineans. These outcomes validate UNCDF’s intervention strategy, which combines an affordable financial service offering with financial education in local languages ​​delivered through digital media. This strategy includes services accessible via mobile phones which facilitate transactions and reduces the physical distance between customers and financial institutions.

For UNCDF, INTEGRA constitutes a first in Guinea. These initial steps towards better financial inclusion of young people are important to better understand the constraints and challenges -- such as the cost of access to finance, the lack of information and skills of young people and the limited capacity of regulators to promote the emergence of innovative services, particularly digital ones.

The INTEGRA programme intends to contribute to a new dynamic in the socio-economic development in Guinea. Initiated jointly by the Guinean Government and the European Union under the Emergency Trust Fund for Africa, INTEGRA creates opportunities for Guinean youth through preparation for professional life in schools, construction of infrastructure, vocational training, the creation of sustainable jobs and the development of entrepreneurship.

Through this programme, more than 15,000 young people will be directly supported to implement this new socio-economic dynamic by creating jobs and supporting the development of entrepreneurship in Guinea.