As global aid budgets tighten and the development landscape undergoes rapid transformation, the question of how to finance opportunities for young people in rural economies has never been more urgent.
The Global Donor Platform for Rural Development’s Thematic Working Group on Rural Youth Employment (TWG RYE) hosted a webinar, moderated by Genna Tesdall (Group Co-Chair and Director, YPARD) to unpack this very challenge and to spotlight how innovative financial mechanisms can catalyse meaningful employment for youth.
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Global development finance trends
Savis Sadeghian, Senior Technical Specialist, Multilateral Climate and Environmental Funds, International Fund for Agricultural Development (IFAD), set the scene with an overview of the shifting landscape for development finance. As concessional aid declines and public debt rises, developing countries need over US$4 trillion annually to meet the Sustainable Development Goals and climate targets. Meanwhile, youth unemployment remains three times higher than that of adults globally, with most young people in the Global South working in informal and low-quality jobs.
New financing models, such as green bonds, carbon markets, and blended finance, are increasingly helping to fill the financing gap. However, the mere existence of these instruments is not enough. Their design and inclusiveness will determine whether young people and marginalized communities benefit or are left behind in a rapidly financializing development landscape.
Development finance must not only recognize youth as beneficiaries, but also empower them as co-creators and implementers. This means establishing dedicated youth windows and advisory roles within climate and blended funds, using blended capital and guarantees to de-risk youth-led ventures, and pairing finance with mentorship and technical support. It also calls for measuring the quality and inclusivity of employment through youth- and gender-disaggregated data, and aligning Nationally Determined Contributions (NDCs) and financing frameworks to embed youth participation and accountability across institutions.
Download presentation in PDF: (https://www.donorplatform.org/wp-content/uploads/2025/10/GDPRD-SS-071025-.pptx)
Innovation in development finance
Peter Umunay, Thematic Lead, Food Systems and Land Use, Global Environmental Facility (GEF), outlined how global climate funds are evolving to advance inclusion within environmental and development initiatives. Since its establishment in 1991, the GEF has provided US$26 billion in financing across 186 participant countries and more than 1,700 projects and programmes, channelled through mechanisms such as the GEF Trust Fund and Climate Change Adaptation Funds.
GEF’s growing focus on integrated programmes links environmental sustainability with rural livelihoods, including resilient food systems, ecosystem restoration, and sustainable landscapes. For the GEF, youth are not peripheral actors, they are “change agents” driving innovation in agricultural value chains.
In northern Nigeria, for example, GEF-supported projects have enabled youth to lead extension services and alternative livelihood initiatives. In Western Kenya, youth groups manage agroforestry nurseries and supply coffee seedlings to local markets. Looking ahead to GEF’s next replenishment cycle, GEF-9 (2026–2030), youth participation is being embedded into programme design, from governance structures to dedicated funding lines.
The Fund’s Small Grants Programme and Challenge Programme for Adaptation Innovation are already creating space for youth-led enterprises and civil society groups to access funding directly, bypassing traditional bottlenecks. However, success will depend on strong national policy frameworks, robust partnerships, and continued learning and innovation.
Andreas Müller, Thematic Lead for Innovative Finance, Helvetas, highlighted how blended finance can tangibly support youth and small-scale farmers. In partnership with Zurich-based impact investor iGravity, Helvetas is developing a Green Rice Bond, a US$25 million blended finance instrument designed to strengthen sustainable rice value chains in sub-Saharan Africa. Targeting Kenya, Tanzania, Ghana, and Senegal, the bond combines commercial and concessional capital to support small-scale farmers, many of whom are youth or women, while a technical assistance facility provides training, risk management, and financial literacy.
By linking finance with technical support, the initiative reduces risks for both investors and farmers, while boosting productivity, resilience, and market access. It also trains financial institutions to design tailored financial products for value chain actors. For example, traditional loans often lack grace periods, making it difficult for farmers to repay loans if market prices are low at harvest. Helvetas helps financial institutions address these challenges through targeted technical assistance.
The broader goal of the Green Rice Bond is to create a scalable financial model that can be replicated across regions, promoting sustainable farming practices, higher incomes, and resilience against climate change and food security challenges. By strengthening agricultural value chains, the initiative also helps absorb the growing influx of young people entering sub-Saharan Africa’s labour market.
Download presentation in PDF: (https://www.donorplatform.org/wp-content/uploads/2025/10/Green-Rice-Bond_YPARD-Webinar.pdf)
Aminul Moven, Agricultural Economist and Director of Climate Change & Risk Mitigation, Sustainable Agriculture Foundation (SAF) Bangladesh, described how youth-led entrepreneurship is reshaping rural finance at scale. With nearly 46 per cent of Bangladesh’s population under 30, the Foundation’s approach focuses on transforming youth from “loan seekers to opportunity creators.”
Through SAF’s Farmer Hub model, over 700 youth entrepreneurs now operate one-stop service centres that offer mechanization, crop insurance, and market linkages to small-scale farmers. The Foundation has also pioneered bundled crop insurance, protecting more than a million farmers, and launched Bangladesh’s first agroforestry-based carbon credit program, which integrates sustainable mango cultivation with verified carbon markets.
Moven highlighted the untapped potential of carbon finance to unlock new income streams for youth and rural communities, provided that systems for monitoring, reporting, and verification (MRV) are accessible, and youth are trained in digital tools such as drone mapping and soil analytics. He concluded, “Carbon credits are not just for the planet, they are also for the next generation of rural entrepreneurs.”
Conclusion
Despite fiscal pressures, the momentum for youth inclusion in global finance is growing. The speakers agreed that the future of development finance must be inclusive by design. Emerging tools, such as green bonds, blended capital, and carbon markets, hold great promise but only if they actively lower barriers for young people, women, and marginalized groups. Genna Tesdall, TWG RYE Co-Chair and webinar moderator concluded, “A job is not just a job; it must be a decent one, in a space where young people can affect change.”
This webinar builds upon the last webinar of the Thematic Working Group on Rural Youth Employment (TWG RYE), Investing in Youth: The Role of Development Banks. The TWG RYE remains committed to raising awareness and sharing knowledge on effective ways to support and empower rural youth and enable their contributions to sustainable food value chains.
