African Development Bank (AfDB) President Akinwumi Adesina said on Wednesday that the multilateral lender would soon establish investment banks for young entrepreneurs on the continent.
Adesina, who told the Commonwealth Business Forum in Kigali, Rwanda, criticized the structure of existing commercial banks on the continent.
He said the current model of financial institutions in Africa was not designed to favor young people, adding that if 21-year-olds tried to get loans from banks, they would ask for 40-year tax receipts in the purpose of discouraging them from accessing financial support. .
The AfDB chief stressed that investment banks for youth entrepreneurship would focus on the life cycle of a business, including credit and equity support.
Ripples Nigeria reported that the youth-focused bank, which is expected to create wealth for the continent’s young populations, is under design and will be ready by the end of this month.
Adesina said: “Our financial institutions are not designed for young people, we have a missing market to serve them. We have a population of 455 million inhabitants, it will rise to 845 million by 2050. We must therefore create a new financial ecosystem around young people.
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“And that is why, at the African Development Bank, we have taken the decision to create now what will be called the Investment Banks for Youth Entrepreneurship. It will be new financial institutions that will create support ecosystems around youth businesses.
“Today you go to a bank, you try to get some money, they ask you how old are you, you say 21, they tell you go get your tax receipts for the last 40 years, that does that really mean?
“But these youth entrepreneurship investment banks will finance youth businesses in a life-cycle model, throughout using different instruments; from technical assistance to debt (and) equity financing to develop their activities.
“The point I’m trying to make is this, the future that we’re talking about at the start of this panel, for that to happen we need to create new financial institutions that can create wealth for young people.
“That’s what we’re focusing on. And those institutions, by the way, we’re designing them now and will be ready by the end of this month.
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