As the global population grows, it has been estimated that by 2030 the world will need more than 600 million new jobs. Many of these will be required in developing countries, where young people already struggle to find work, pay is low, and working conditions are often poor.
October 13, 2022
As the global population grows, it has been estimated that by 2030 the world will need more than 600 million new jobs. Many of these will be required in developing countries, where young people already struggle to find work, pay is low, and working conditions are often poor.
With few opportunities for decent work, many of the world’s poorest young people are self-employed or start their own businesses. Indeed, the World Bank considers small- and medium-sized enterprises (SMEs) to be a key element of new employment opportunities in lower-income economies.
But starting a business anywhere is fraught with risk. Failure rates are as high as 75% in Ethiopia and Rwanda, 74% in Ghana, and 67% in Zimbabwe.
Failure is more likely where interest rates are high and when prospective entrepreneurs lack collateral, which blocks proper financial support—a vital part of the survival of new businesses and the new jobs they can create.
Unfortunately, secure financial support is not as widely available as it might be. In developing countries, just 15% of young people have saved money with a formal financial institution. Our survey highlights the varied experiences of young people (under 35) from low-income communities using financial services.
And it’s not only support for start-ups that our survey shows is lacking—we also saw a more basic failing of the financial sector for individuals, and particularly women.
Many of the people we surveyed (from 21 countries including Sri Lanka, Sierra Leone and Malaysia) preferred to take a more informal route to getting money. Around 83% said they turned to their family for financial support, 16% to community savings schemes, and 9% to informal money lenders.
