Lessons in innovative financing for creating employment in the Middle East and North Africa

Ahmed Elassal Livelihoods, Women's Economic Empowerment, Youth employment


Emerging market economies face a significant credit gap and access to finance is considered the biggest obstacle for enterprises. Banks have been the traditional source of funding, but the financial crisis has led banks to be even more reluctant, which is creating an active debate about the importance of broadening the range of funding options available beyond banks.

Such debates are relevant in the Middle East and North Africa (MENA) region where female unemployment rate is higher than in other regions. Only about 17.9% of women are active in the labour market compared to the global average of 47.1%. The majority of women are engaged in the informal sector and work under poor conditions. Challenges for women have increased significantly in the wake of the Coronavirus crisis. According to an Oxfam report, Care in the Time of  Coronavirus, women are hit hard by the pandemic. The heavy and unequal care responsibilities are trapping women in time and income poverty and excluding them from active participation in economic activities. Access to finance is a crucial need for women entrepreneurs.

The Micro, Small and Medium Enterprise (MSME) sector has the potential to create jobs and employ women and young people. Studies indicate that this sector contributes to a large percentage of employment. Start-ups and micro-businesses, especially social / impact-driven enterprises, have proven to be an alternative for livelihood recovery during the Coronavirus pandemic when jobs disappeared from the labour market as a result of the sudden closure of many medium and large-sized businesses.

However, innovative approaches are rays of hope that can help in mobilizing finance for the enterprise. For example, it can be done through collective action at the community level through community-based organisations, self-help groups, and cooperatives. Alternatively, one can use innovative and market-based capital such as crowdfunding and angel investment. Experiences of increasing investment opportunities and supporting self-employment can be useful for decision-makers and donors.

Oxfam’s Youth Participation and Employment (YPE) programme in the MENA region addresses these issues by supporting start-ups and micro-enterprises through community-based support services and linking with innovative financing.   

Community-based support services: Through the partnership with Better Life for Development and Training in Egypt, and Shanti in Tunisia, the YPE supported women entrepreneurs, artisans and the local handcrafters from poor and marginalised communities by facilitating them to get organised into community-based groups. Shanti is a social enterprise that supports Tunisian potters linking with markets without going through intermediaries. A social enterprise is defined as a business that has specific social objectives as its primary purpose. Social enterprises seek to maximize profits and consider benefits to society and the environment. Better Life is a non-profit organization that works to organize and empower women artisans in the handcrafts sector. The organisation has supported a group of women handcrafters, who have lost their jobs, to establish and lead the first women cooperative in Egypt (Women’s Cooperative Association for Heritage and Handicrafts). This support has contributed to improving women’s sustainable livelihoods, as well as enhancing their technical skills and improving their production and marketing activities.

Innovative financial services: The YPE partner, AUC Venture Lab is Egypt’s university-based start-up accelerator program. It offers seed capital awards when a start-up completes the acceleration program cycle. High growth potential start-ups are supported for applying to AUC Angels (AUC-based angel investors network) to secure further funding. Another YPE partner organization, Impact Partner (previously Yunus Social Business) is an unique Impact Investing Fund in Tunisia. They have developed acceleration and financing programs to support social entrepreneurs for building sustainable businesses and maximizing their social Impact. Impact Partner is concerned about decent job creation for women and youth.

There are several other examples from Oxfam programs where financial inclusion helped in overcoming barriers for enterprises.

Lessons learned in financing from the YPE experience

  1. Demand for self-employment is growing due to loss in jobs in both formal and informal labour markets. Jobs have reduced due to lockdowns and closure of businesses during the pandemic. Young people have few choices other than to start their own business or enterprise. Start-ups need finance and business support services. This gap must be filled through new business models. The traditional approaches to promote MSMEs is constrained due to lack of resources and increasing demand for financing. Donors and program planners should work together to increase investment on entrepreneurs.
  2. Financing can support MSMEs in increasing production and creating jobs for women and young people.  Alternative ways to finance entrepreneurs is emerging in the MENA region, such as crowd funding and angel investment, which can provide women and youth financial opportunities to scale up start-ups and explore business ideas. Governments in the region are rapidly responding to the needs of entrepreneurs by adopting such financing options. For example, Tunisian government’s recent law on crowd funding  has potential to boost entrepreneurship in the country.
  3. A social and solidarity economy approach can increase community-based financing opportunities for women and young people to work collectively in a decent and safe working environment. Community-based self-help groups have potential to create social space for women and provide them resilient and flexible option for financing small enterprises. It allows vulnerable and marginalized groups to come together and work collectively. Legislations can help disadvantaged and marginalized groups to benefit from sustainable and decent economic opportunities. There is another example from Tunisia where, it is hoped that the social and solidarity economy law will facilitate creation of equitable and inclusive jobs for vulnerable women and young people.
  4. Coronavirus posed more challenges for women’s economic activities than other businesses. Unpaid care and domestic work have significantly increased barriers for women to work amidst the pandemic and restricted mobility. Assessing gender dynamics of care work is a crucial step to identify sustainable solutions to support women entrepreneurs. 
  5. To support participation of women in the entrepreneurship ecosystem and create self-employment opportunities, it is crucial to address inequalities in labour markets. According to the ILO, women are more likely to work longer hours than men when both paid and unpaid work is considered. In addition to household care responsibilities, limited access to safe transportation is the greatest challenge for women to work. Creating an enabling environment for women entrepreneurs is vital for an inclusive and just economic development.
  6. The financing models should consider green jobs and climate friendly enterprises. The environmental factors will continue to affect production and the economy. It is possible that in the rush to support enterprise development one may overlook the environmental concerns. For example, enterprises might be in the agricultural sector where land and water management would be a key concern to increase production and sustainable growth. Social enterprises must consider the risk of environmental degradation when investments are planned.

Contributions and ideas from Oxfam teams led by Ahmed Ben Nejma in Tunisia and Youmna Al Khattam in Egypt have inspired the lessons learnt.


Ahmed Elassal


Shekhar Anand