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Model concept

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The state of yputh umempolyment in Ghana and propose solution to the problem through innovative financing with business development skills

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Model concept

  1. 1. TITLE: A MODEL CONCEPT TO ADDREESING YOUTH BUSINESS FINANCING IN AGRICULTURE AND AGRIBUSINESS IN GHANA AUDIENCE: POLICY MAKERS, FINANCIAL INSTITUTIONS, DEVELOPMENT FINANCE PRACTITIONERS AND YOUTH ENTERPRENUERS Introduction Youth unemployment in Ghana has persisted in spite of several interventions to address the problem. Although agriculture is the mainstay of Ghana’s economy and the sector employs over 60% of Ghanaians, the youth do not find the sector attractive enough to engage in agricultural activities. The connection of the youth in Agricultural and Agribusiness is crucial to create the needed synergy to grow the sector and make the private sector has an engine of growth a reality. Lending to agricultural enterprises can be an important opportunity for growth due to a variety of factors. There is a rapid sector expansion due to increasing demand for food and commodities in general. There is increasing emergence and development of profitable agricultural value chains, (IFC 2012), secondly access to business development services to address the technical and entrepreneurial challenges in youth businesses as been a challenge. Access to mentoring and incubation to inspire the youth to pursue agriculture and agribusiness has been absent. The availability of these three services taught in a holistic manner would address the seaming gap between the academia and industry in Ghana Agriculture and agribusiness is projected to be a US$1 trillion business in Sub-Saharan Africa by the year 2030 and must therefore be at the top of the agenda for economic transformation and development (World Bank, 2013). The distinction between agriculture and agribusiness is rather blurred and it is best to take agriculture and agribusiness as a continuum. On one hand agriculture is the cultivation of all forms of plants and animals for food, fiber and other products for human use. On the other hand, agribusiness is the range of businesses in the value chains of agricultural activities such as production of seeds, processing of farm produce, marketing, packaging and supplies of agricultural inputs. Agriculture and agribusiness constitute a continuum as well as a holistic systemwhich allows us to see a multiplicity of business opportunities for the youth. This would lead to establishments of taxable businesses and the governments sources of revenue are broaden. Financial institutions would have more clients to lend out thereby increasing their portfolios and revenues
  2. 2. Many interventions have been implemented over the years to address youth employment in Ghana but all have failed, among them are the national youth employment programme , Ghana youth and entrepreneurial agency ( GYEEDA), youth in agriculture programme, etc. all these intervention did not strategically address the following obstacles has listed below; i. Providing access to incubators. ii. Providing access to business development support services iii. Facilitating access to finance Providing access to Incubators The role of the incubator is to provide a variety of opportunities, which will help businesses grow to viability, at rates that can be afforded. In an attempt to increase sustainability, the incubator can combine the traditional incubator concept with a business enterprise centre model. The strategic actions are  Prepare young people to take the next step towards starting their own business and teach them the skills to manage the operations of a business  Provide support services and infrastructure to high potential start-ups such as start-up kits (including land and business premises), business advisory and support services, access to investors, markets and international networks, mentoring and a full-time, hands-on management coaching.  Establish Agribusiness Incubation Centres that will be used to support the growth of youth-owned enterprises and to mainstream youth enterprises to already existing incubators to increase accessibility  Identify/explore promising technologies, innovations or ventures for commercialization in collaboration with research institutions, universities and private sector;  Track agribusiness start-ups to assess best practices/economic viability/expansion; Providing Access to Business Development Support Services To stimulate youth employment generation and equip them with the appropriate knowledge, skills, attitudes and ethics of entrepreneurship, it is critical to provide them with various support services such as business infrastructure, technologies, access to markets and capacity building and skills development. This will ensure that the growth of youth enterprises and sustainability. Strategic actions for achieving these include:
  3. 3.  Establish Business Advisory Centres (BACs) in rural and urban centres  Exploration and expansion of the novel approaches toward youth empowerment;  Linking up with research institutions to access technologies that are ready for commercialization  Provide training on returns to agriculture and agribusiness investment;  Introduce trained youth to new, profitable agricultural and agribusiness ventures;  Provide training in marketing, literacy and numeracy, and business management:  Provide training in occupational health, safety and environmental management, quality Facilitation of access to finance Most youths lack access to micro-finance and collateral for accessing loans. As a result, providing access to finance becomes critical to youth business start-ups and growth. This type of support will assist in the creation of a sustainable business environment that is sensitive to the needs of micro and small enterprises and youth enterprises. Financial products should include youth perspectives to address issues of collateral Train youth agribusiness entrepreneurs in financial services provisions and management linked to banking institutions; Provide assistance in business plan development and loan application, including the development of incentives that interface with lending institutions; Access to finance as dominated the obstacles to the growth of small and medium enterprises in Ghana and youth businesses has not been an exception. It propose that, private sector ( Banks) governments and other developments finance institutions development various interventions to gradual introduce youth businesses to banks and improve commercial relationships between clients and youth business, this could include;  Establish a matching grant  Establish challenge grant  Establish a start-up fund It is propose that a youth business financing model should strategically be inter twined with business incubation, business development services and an innovative access to finance model that involves the private sector ( financial institutions, beneficiary and government). The grant portion should be gradually reduce to increase a commercial relationship between clients and financiers The above proposal would lead to the establishments of real agriculture and agribusiness businesses in Ghana and further solve the youth employment crisis in the country. Financial
  4. 4. institutions would begin to build trust and confidence in youth businesses and developed various financial products to meet the needs of youth businesses

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