Boosting youth entrepreneurship through informal credit in Benin
A lack of public sector employment opportunities in Benin is pushing youth into self-employment (under 20% are in wage employment). However, a lack of credit to start or grow a business is one of the main obstacles facing Benin’s young entrepreneurs. Despite the Government of Benin implementing measures to promote entrepreneurship, financial inclusion remains low, and formal finance options are not accessible to everyone. A team of local PEP researchers found that access to credit, whether from formal or informal sources, plays an important role in the performance of small-scale youth enterprises in Benin. In particular, credit from informal and family sources is more important to their performance than credit from formal sources for relatively small (in terms of sales) youth enterprises and start-ups.
Find out more in the PEP working paper 2020-16 and policy brief 206