Akinwumi Adesina, the President of the African Development Bank (AfDB), declared on Wednesday that the multilateral lender would quickly set up investment banks for young entrepreneurs in Africa.
Adesina attacked the organizational design of the regional commercial banks when he made this statement during the Commonwealth Business Forum in Kigali, Rwanda.
He claimed that the current financial institution model in Africa was not intended to benefit the younger generation, and he added that if 21-year-olds tried to get loans from banks, they would demand 40 years’ worth of tax returns in an effort to deter them from doing so.
The President of the AfDB emphasized that the Youth Entrepreneurship Investment Banks would concentrate on the entire business lifecycle, including credit and equity financing.
The youth-focused bank, which is anticipated to generate wealth for the continent’s young inhabitants, is now being created and will be ready by the end of this month, according to Ripples Nigeria.
Adesina said: “Our financial institutions are not set up for young people, we have a missing market to serve them. We have a population of 455 million, it’s going to rise to 845 million by 2050. So we have to create a new financial ecosystem around young people.
“And that’s why at the African Development Bank, we took the decision that we are going to now create what is to be called Youth Entrepreneurship Investment Banks. They will be new financial institutions that will create ecosystems of support around the businesses of young people.
“Today, you go to a bank, you try to get money, they ask you how old are you, you say 21 years old, they say go and bring your tax receipts for the last 40 years, what does that really mean?
“But this Youth Entrepreneurship Investment Banks will finance the businesses of young people in a lifecycle model, throughout as you use different instruments; from technical assistance, to debt (and) equity financing to grow their businesses.
“The point I’m trying to make is this, the future that we are talking about at the beginning of this panel, for it to happen, we have to create new financial institutions that can create youth-based wealth.
“That is what we are focusing on. And those institutions by the way, we are designing them now, and will be ready by the end of this month.”
