Capitalizing on the potential of Bangladesh's young entrepreneurs
Posted June 1, 2022
Think big and bold, learn and be curious, create impact and inclusiveness, and deliver results – these are some of the values of iFarmer, a youth-led social enterprise featured in new research on the ecosystem for youth entrepreneurship in Bangladesh. The study was commissioned by Youth Co:Lab, an initiative co-led by UNDP and Citi Foundation, Islamic Development Bank and Startup Bangladesh Limited and produced by LightCastle Partners. iFarmer enables small scale farmers and agri-businesses to maximize their profits by providing them with access to finance, input supplies and markets in Bangladesh. The tech-based company has supported over 46,000 farmers through the “Sofol” app and facilitated more than BDT 90 million funding, a little over US$1 million, in support for farmers across Bangladesh.
Youth-led enterprises like iFarmer have the potential to be the drivers of sustainable development and inclusive economic growth in Bangladesh. They can develop employment opportunities and act as inspiring role models for other Bangladeshi youth, among whom employment is one of the most pressing challenges. They have the capacity to innovate and tackle environmental and social challenges faced by their peers and communities.
In order to amplify the potential of youth-led enterprises, it is crucial to understand the strengths of young people and the barriers young entrepreneurs face relative to adult-led enterprises. The first ever research study on the Bangladesh’s youth entrepreneurship, aims to support data-driven decision-making and guide the efforts to strengthen the enabling environment for youth entrepreneurship in Bangladesh over the coming years.
The report is in line with the new strategic priorities of the IsDB for 2022-2025, specifically Tackling Increasing Poverty & Building Stronger Resilience, which includes promoting job creation especially amongst youth by supporting microfinance to MSMEs and supporting skill development and expanding private sector opportunities. It is also aligned with UNDP Bangladesh’s new Country Programme Document and with the Sustainable Development Goals (SDGs), particularly SDGs 1, 4, 5 and 8. The results demonstrate that catalyzing the potential of youth entrepreneurship requires multi-stakeholder efforts across the ecosystem, from the implementation of policies and legal frameworks to the development of human capital and entrepreneurship culture and strengthening access to finance, support services, digital and technological solutions, and infrastructure. A youth-responsive lens of the analysis helps understand the particular strengths and vulnerabilities of young people. It also reveals the diversity of potential and needs of young entrepreneurs, including young women, minority youth and youth living in urban and rural areas.
What are the key barriers and entry points for strengthening the enabling environment for youth entrepreneurship?
Integrating entrepreneurship education in the curricula at all levels of education would help ensure that youth have the skills required for starting and operating a business and that they are able to effectively communicate and market their ideas to consumers and investors alike. Stronger industry academia linkages and investments in vocational and technical education would help young people acquire in-demand skills. Entrepreneurship education is also a potential means to boost a culture that is supportive of entrepreneurship as a career option and encourage young women to establish businesses. Young entrepreneurs can benefit greatly from business development support services that provide access to networks, mentors, resources, and information. The study provides examples of multiple government and private sector organizations leading business development support programmes, such as accelerators and incubators. Despite the availability of the services, their uneven geographical distribution limits access to support, particularly among youth in rural areas.
Relative to entrepreneurs in urban areas, the growth and development of youth-led enterprises in rural areas is also hindered by the complexities in the access to national markets and inefficiencies in agricultural supply and value chains. The study suggests developing targeted means to address these barriers to support youth entrepreneurs outside urban centres. Despite the availability of a range of traditional and non-traditional financing options, there is a need to strengthen entrepreneurship-specific finance for different enterprise types such as MSMEs, start-ups and social enterprises and ensure that young people are aware of the available options and have access to them. Young women face specific challenges in access to finance due to gendered cultural barriers and limited assets that can be used as collateral. The study recommends promoting mandatory quotas of financing for minority and female youth entrepreneurs.
Policies and regulations are the backbone of the entrepreneurship ecosystem. Youth responsiveness of the policies entails that they recognize and address the particular needs of young people and different enterprise types. Youth-friendly legal processes are accessible, effective, and understandable for young people. Currently, lengthy and complicated processes related to business establishment and development limit youth’s opportunities to realize their entrepreneurial ideas. A digital one-stop online portal is a potential solution to make it easier for young people to kick start their entrepreneurial journey in Bangladesh.
Data-driven decision making related to the development of policies and the overall ecosystem for youth entrepreneurship can be supported by strengthening theavailability of comprehensive, segmented and nationally representative information on young entrepreneurs.
Call to action
As of 2020, approximately 63.7 percent of Bangladesh’s population were under the age of 35. However, Bangladesh will become an ageing society in 2029. The window of opportunity to capitalize on this demographic dividend should not be wasted. The study calls for multi-stakeholder actions to tackle identified barriers and support youth empowerment through entrepreneurship. It encourages learning from a number of good practices and strengths within the youth entrepreneurship ecosystem, from the solutions developed in the high potential sectors and from a diverse network of stakeholders involved in the ecosystem. UNDP and IsDB invite all the stakeholders to join the efforts to strengthen the ecosystem through knowledge sharing and the initiation of brave, forward-looking actions to catalyze the potential of young entrepreneurs in Bangladesh.
This article was originally published in issue 16 of Islamic Development Bank Group’s SDGs Digest.