Partner Microfinance Foundation Youth project Case Study from Bosnia and Herzegovina

,612, EUR ,21% Partner Microcredit Foundation Basic indicators as of September 30 th 2011 No. of loans disbursed from the beginning of the operations Total amount of disbursed loans from the beginning of the operations Active clients % of youth clients No. Of employees _________ Loan Officers No. Of branch offices

Why? - Lack of work experience; - Mismatch of education system, national qualifications framework and labour market needs; Youth unemployment rate in B&H 58% % of youth who would leave B&H if they can57% % of youth (15- 29) who live with their parents 85% % of married couples (up to 30 years) do not have their own place93% % of youth that are members of youth organizations2% Youth in Bosnia and Herzegovina

business training To increase self-employment opportunities for young people in Bosnia and Herzegovina, by providing complimentary market-oriented business training for youth clients in addition to loans. To increase self-employment within Partner’s clients To enable youth clients to obtain practical knowledge and skills in order to sustain their businesses To measure the usefulness of training and impact on business sustainability

The project included about 400 young entrepreneurs who will randomly be divided in the following four groups: youths with a maximum maturity and a maximum loan amount youths who are offered to extend their loan term to 60 months youths who are offered to extend their loan term to 60 months AND increase their loan size to app 5000 Eur youths who receive the loan as specified in 1) and are offered free business training Total of: 445 clients -2/3 received a comprehensive business training + financial literacy -1/3 control group The randomization was stratified by gender, baseline financial literacy level, industry, and baseline profits Monitoring & Evaluation This project conducted a randomized experiment designed to assess the impact of increasing maturity and loan size on business investment and growth.

Passivnes of the youth in B&H YP are not focused on a survey Very complex and time consuming organization of BT Declaratively ready to start-up own business Not realistic in planning Difficulties in motivating the clients to attend BT (small allowances) The financial crisis may affect the final IMPACT study Youth project / Market research CHALLENGES

 36% new businesses shot down  Improved business practices (17%)  Encourages new business investments (11%)  More capital growth (15% but 54% in some subgroups)  Separation of business from personal accounts  Refinance the loans under more favorable terms  Obtain new loans with lower loan installments  Improvements in business performance and sales Findings from the World Bank’s study on Partner’s clients stating that the development of practical business skills can influence the following:

Monitoring and Evaluation for Youth Workforce Development Projects “The Impact of Business and Financial Literacy for Young Entrepreneurs: Evidence from Bosnia and Herzegovina” by The World Bank Development Research Group Finance and Private Sector Development Team April 2011 www-wds.worldbank.org Selma Cilimkovic, Market Research officer