In Burkina Faso, many citizens, especially young people, are forced to abandon their entrepreneurial dreams due to the difficulty of meeting the requirements set by financial institutions. This barrier is particularly pronounced for young people, women and those living with disabilities.
As in most countries in West Africa, they are often perceived by financial institutions as ‘high-risk clients’, making it difficult to establish sustainable small and medium-sized enterprises (SMEs) and secure adequate financing. According to a World Bank study on youth entrepreneurship in Africa, SMEs often lack the resources to provide the collateral required by banks.
In addition to the various prejudices that people with disabilities face, access to credit to run their own SMEs is an issue that has a direct impact on their livelihoods. Households with a person with a disability experience higher poverty rates compared to households where nobody has a disability, and individuals with disabilities have lower employment rates than their non-disabled counterparts. Often seen as a solution, Decentralised Financial Systems (DFS*) (microfinance institutions) come with their own challenges, including high interest rates (over 20%) and strict guarantees.
*Translation of Système Financier Décentralisé
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According to a baseline study conducted by our department in 2016, four out of five women have problems accessing finance. This is due to a lack of collateral and high interest rates. Their projects are considered less bankable.
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Recognising the importance of tailored financial services, Rikolto and its partners in the Centre-East region of Burkina Faso have embarked on a participatory journey to promote inclusive financial opportunities for women, young people and those with disabilities in the region. By combining entrepreneurship incubation programmes and facilitating multi-stakeholder dialogues, they aim to address power imbalances and create a shared vision.
These effortsare part of the Project to Enhance the Competitiveness of Rural and Urban Enterprises and to Create Decent, Inclusive and Sustainable Jobs (PACE-DID) in Centre-East Burkina Faso, implemented by Rikolto, TRIAS and SOS-Faim,and financed by the Belgian development agency (DGD) - Enabel.
Through thePACE-DID project, 80 young entrepreneurs, women, and people withdisabilities in Centre-East Burkina Faso have participated in business incubation activities. These initiatives have linked them with financial and non-financial service providers, helping them to develop business plans and to recover. The project has enabled entrepreneurs to secure loans at favourable rates, thanks to the collaboration of financial institutions.
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Mohamed YOUMA, a youngentrepreneur with a poultry feed production unit who took part in theincubation programme, explained: “I had never tried to apply for a loanbecause of the problems with guarantees.” Thérèse Bere, another participant, showed great determination in attending a series of training sessions designed for entrepreneurs who already owned businesses, such as her weaving business, despite the fact that she had difficulty walking. Initially, she had reservations about DFS GRAINE’s offer for her to repay her loan in monthly instalments. However, after gaining a deeper understanding of Decentralised Financial Systems (DFS) and loan application criteria, she accepted the offer and successfully repaid her first loan on time.
“The incubation process has empowered people with ideas to bring their own businesses to life. In order to enhance the sustainability of their projects, we have focused on facilitating their access to finance,”
Bernadette Ouattara, Regional Directorof the Good Food for Cities (GF4C) programme | Rikolto in West Africa
“Decentralised Financial Services are seeking solutions tailored to the needs of their respective targets. The main challenge is how to support these young people interms of credit”
Alassane Rouamba, East Regional Director | Microfinance institution - Caisse Populaire
However, further action is needed to ensure the sustainability of these businesses beyond the project period. Rikolto and its partners recognise the complexity of the access to finance challenge, which calls for the collective efforts of multiple stakeholders.
Multi-stakeholder dialogues have been conducted with financial institutions, DFS providers, technical partners and representatives of young entrepreneurs, women and people with disabilities, with the aim of identifying common concerns and devising effective solutions.
Rikolto has recruited two facilitators, a man and a woman specialised in value chain promotion, aswell as marketing experts to initiate the Multi-Stakeholder Dialogue (MSP)process. They:
“During the dialogues, we identify a lot of prejudices between the financial actors and the entrepreneurs” – Souleymane Gamene, facilitator of the multi-stakeholder dialogue for the PACE–DID project.
The dialogues have revealed prejudices and reluctance among the participants, stemming from past experiences, and perhaps a limited understanding of each other’s needs. The facilitators used participatory methods to address power imbalances, ensure constructive communication and cooperation and involve all stakeholders on an equal footing. For instance, among the youngsters, those who demonstrated eloquence and genuine concern were appointed to speak on behalf of their peers.
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By conducting a study on access to finance and fostering open exchanges, stakeholders have come together to address the issue collectively. The dialogues revolved around the theme of improving the mobilisation of financial resources and developing tailored guarantee solutions for women, young people and those living with disabilities in accessing finance.
“We were invited to discuss a common issue: financing for young people. Initially, it was a specific issue for us, but now it has become an issue for everyone working on entrepreneurship. We do not have the same strengths or the same knowledge. But if we join forces with a determination to succeed, we will succeed”
proudly states Souleymane Balma Regional Federation of Craftsmen in the Centre-East region of Burkina Faso (FRA/CES).
Through their collective efforts, a strategic plan has been formulated to outline the vision for 2027. The objective is to provide tailored financial solutions to young people, women and individuals with disabilities in the Centre-East region and to facilitate the creation of competitive and viable enterprises.
“The fact that we have everyone around the table means that we can come up with solutions that are easy to put into practice”
Corinne NIKIEMA, National Fund for Inclusive Finance (FONAFI)
Stakeholders have committed to implementing an action plan developed during the dialogues, which includes engaging with authorities and international institutions in the region through advocacy efforts. By fostering better business relationships and influencing policy, they aim to break down barriers and create an enabling environment for entrepreneurs.
“The activities have been proposed directly by the stakeholders who took part in the dialogue. We have defined specific actions to enhance collaboration between the entrepreneurs and microfinance institutions,” says Alassane Rouamba, Director of the Eastern Region of the Caisse Populaire in Burkina Faso, a private microfinance institution. Dieudonné COMPAORE, representative of the Burkinabe Fund for Economic and Social Development (FBDES), a public fund, adds: “The strategies and activities designed to achieve our vision can be shared with other financial institutions”.
“By implementing these initiatives, we will achieve greater autonomy and become role models for young people, women and people with disabilities. Our entrepreneurial efforts will surpass those of other regions. Everyone will be actively involved, and other regions will look up to us as an example to follow.”
Thérèse Bere, Enterpreneur
Entrepreneurs like Thérèse will not simply be on the sidelines, but will actively contribute to the implementation of the road map. Young Mohamed Youma has a clear idea of the potential benefits the project can bring to his peers:
[The project’s activities] will enable us to turn our dreams into reality and to cure social ‘ills’ such as banditry. Engaging in these activities can truly bring about healing and restoration
The next phase is already underway. The established committee is currently planning advocacy activities with the authorities and officials of international institutions operating in Burkina Faso’s Centre-East Region. The aim is to exert a positive influence on the implementation of the actions defined by the multi-stakeholder process. Moreover, the lessons learnt and the impact of the PACE-DID project are currently being documented. They will soon be available for the official closure of the project.
This initiative holds potential for the future of Burkina Faso’s business landscape. The transformative power of multi-stakeholder dialogues could empower young talents, address societal challenges and unlock the dreams of aspiring entrepreneurs.
By addressing power imbalances and promoting inclusive finance, Rikolto and its partners are paving the way for a more equitable and thriving entrepreneurial ecosystem in Burkina Faso.
Editors: Selene Casanova and Irene Salvi - International Communications at Rikolto.
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