The European Bank for Reconstruction and Development (EBRD) is addressing the issue of youth entrepreneurship and employment in Central Asia by launching a seven-year €200 million (equivalent to US$ 218 million) Youth in Business program, EuropaWire reported on December 13.
It is reportedly designed to provide better access to finance and relevant training to young entrepreneurs in the region, where up to one third of the population is aged between 18 and 34 years.
The Youth in Business program in Central Asia (YiB CA) will target micro, small and medium-sized enterprises (MSMEs) led or owned by young individuals under the age of 35. It will consist of up to €200 million for on-lending to up to 20 partner financial institutions in Central Asia and Mongolia; targeted non-financial services for eligible small businesses will be provided by the Bank’s Advice for Small Businesses program to help develop their entrepreneurial skills through training, advisory services and networking opportunities.
The EBRD’s investment will be complemented by a package of up to €30 million consisting of grants and concessional co-financing to stimulate inclusive lending and youth entrepreneurship.
It is expected that the first loan agreements under the YiB CA will include: a loan of up to US$ 10 million to Uzbekistan’s largest private bank Hamkorbank; a loan of up to US$ 8 million to Shinhan Bank Kazakhstan; a loan of up to US$ 4 million to Mongolia’s leading micro lender Transcapital; and a loan of up to US$2 million to Kazakhstan-based microfinance organization Arnur Credit.
A market assessment conducted by the EBRD in the region reportedly reveals that while many young people across Central Asia have a strong entrepreneurial mindset, very few have access to equal economic opportunities. Only around 10 per cent of them have access to necessary training and professional expertise.
This is very important for Central Asia, where MSMEs account for almost half of total employment and contribute to almost 40 percent of regional GDP.
Grant support and concessional finance to the program is provided by the government of Kazakhstan, the Small Business Impact Fund and the European Union.
The EBRD is a leading institutional investor in Central Asia. It has to date provided close to €19 billion through more than 1,000 projects.
