Alternative Financing for Informal Businesses to Propel Youth Entrepreneurship in Sub-Saharan Africa

The "Alternative Financing for Informal Businesses to Propel Youth Entrepreneurship in Sub-Saharan Africa" report is a policy paper jointly authored by Youth Business International (YBI) and Somo, YBI's member organization in Kenya, released in 2024. This comprehensive study highlights the crucial role of informal businesses in sub-Saharan Africa's economy and addresses the significant barriers these enterprises face in scaling up, with a particular focus on women-led informal businesses in Kenya. The report emphasizes that informal businesses, which account for 85% of employment in the region, are vital for providing income-generating opportunities to marginalized groups, especially women and youth. However, these businesses often struggle due to limited access to finance, hindering their growth potential. The policy paper presents findings from a Revolving Loan Fund initiative launched in 2023, which demonstrated the positive impact of providing low-interest loans and financial literacy training to young female entrepreneurs. Based on these insights, the report offers key recommendations for governments, financial institutions, and development agencies to increase access to finance for informal businesses, aiming to propel youth entrepreneurship and economic growth in sub-Saharan Africa.