According to the World Bank, around 3 billion people work worldwide, but only little over half of them are employees with a fixed income. Furthermore, lots of young people are streaming onto the job market, particularly in emerging markets. The World Bank assumes that a minimum of 600 million new jobs need to be created in the next 15 years.
Wanted: A Financial Partner
More jobs with better pay make an essential contribution to development and fighting poverty. However, to create them, companies need reliable partners for their financing needs. OeEB considers creating new jobs by financing companies in developing countries and emerging markets to be one of its core activities. In doing so, attention is paid to developing small and medium sized enterprises (SME). After all, 90% of new jobs are created by the private sector.
Stumbling Blocks on the Path to More Jobs
SME are often the backbone of the economy, and yet they face large hurdles. A study conducted by the International Finance Cooperation (IFC) shows what is preventing companies in developing countries from growing and becoming more productive. Identified as the main reasons were the lack of access to financing, unstable energy and electricity supplies, too much bureaucracy, complicated tax systems, and the lack of access to sufficiently well-qualified workers.
This is exactly what OeEB focuses on – its financings enable companies to overcome economic barriers like insufficient financing or poor energy supplies. It provides capital in the form of credit lines to local banks or by buying shares in funds that create or secure jobs by providing targeted financing for small companies.
The Remedies Vary
There’s no universal remedy for creating new jobs. The different stages of development of each country call for tailored solutions. Furthermore, development banks cannot solve these problems by themselves – but their work is a powerful impetus for additional initiatives that create jobs.