Africa has some of the world's fastest growing economies and a young, rapidly growing population. But a consistent trend in young graduates deciding against returning home at the end of their studies is a threat to Africa's progress. How can investment in entrepreneurship be sustainable in order to help provide job opportunities and improve social inclusion long term?
Boost Africa, a joint initiative between the African Development Bank and the European Investment Bank, aims to harness the continent's potential by investing in local venture capital and seed funds, which in turn finance innovative young entrepreneurs — for example, providing credit to farmers through basic mobile phone technology.
Maria Shaw-Barragan, director of global partners at EIB, told Devex that these kinds of initiatives can get much further through blended finance mechanisms.
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“The innovation is probably in the financial techniques that we're using, in the way in which we are blending public grant funding that would otherwise be used only once,” she said. “We are using it as seed capital to produce much smarter finance … finance that is attracting other lenders and other investors, private sector in particular to contribute to these projects.”
In an interview at European Development Days in Brussels earlier this month, Shaw-Barragan discussed the challenges that remain convincing the private sector that working together for impact as well as profit is possible. Watch the full video above to learn more about the approach.
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