Full Knowledge Base

The need for female economic empowerment in Mozambique is clear; just 24% of women have access to wage employment, versus 50% of men. The situation is worse still in urban settings where 19-24-year-old women have the highest unemployment rates in the country. The national rate of formal employment is approximately 13%, and large scale formal job creation in the Oil and Gas sector is yet to materialise. Despite impressive economic growth in recent years, 50% of Mozambicans are still living in poverty and social and economic inequalities are continuing to grow. The challenges faced by disadvantaged urban youth and women (DUYW) are severe; without deliberate intervention to address the constraints facing them, this trend is set to worsen. In light of this challenge, MUVA commissioned a scoping study to assess the potential of innovative financing models to support the economic empowerment of disadvantaged urban youth and women. Innovative finance is a broad spectrum of mechanisms that offer an alternative to traditional activity based grant funding. It can include investment capital seeking a return, but also encompasses results based financing and broader risk mitigation mechanisms. If done correctly, innovative finance can support good interventions to better tackle entrenched social issues, by sharpening incentives, creating accountability for results, addressing specific barriers in the system, shifting where risk is held and fostering adaptive management. The study identified four innovative financing models that have the potential to enable disadvantaged urban youth and women in Mozambique to access economic opportunities. Some focus more on the supply side, working primarily with DUYW to improve their skills, employability and facilitate entry into the workforce. Others focus on the demand side, working with enterprises to enable them to scale, improve gender practices and encourage them to employ DUYW. Two of the shortlisted models sit across both demand and supply.