CECAM in Madagascar leased over US $2.8 million in 2002-03 to rural microenterprises (with an average US $945 per lease) (Kloeppinger-Todd, Nair and Mulder 2004). Thus, experience with leasing programs is growing and should yield useful lessons. Individuals in pathways 2 and 3, who may need new equipment to start their ventures, would particularly benefit from leasing. Despite the clear potential for leasing to relieve the constraints to access to mechanical technology, few firms have chosen to enter this business.

The needs of young farmers for simultaneous access to finance and information can be addressed by linking agricultural credit to extension services, as has been done in India by BASIX Social Enterprise Group, a livelihood promotion institution. Initially established to provide micro-credit to the rural poor, BASIX now provides rural households with financial services and advice in managing crop and livestock enterprises. Almost 1,000 service providers work with more than 25,000 villages in India under the program. BASIX’s research has shown that farmers prefer cost-saving and risk-reducing interventions to yield-enhancing ones that require more investment; thus the combination of financial services and information or mentoring allows the financial institution to identify the products in greatest demand; e.g., savings, money transfer, and insurance, rather than credit.<sup>10</sup> _Grants._<sup>_11_</sup> Matching grants can be used to promote both employment and employability among young people. Many governments and development partners use matching grant schemes for a variety of purposes, including promotion of improved technologies, empowerment of farmers to hire service providers, strengthening of linkages with private firms through productive partnerships, and provision of rural infrastructure for common use (AgriFin 2012). Grants carry well-known risks of diversion and elite capture, and the successful use of grants depends crucially on the design of programs, with transparency on the rules, checks and balances in monitoring at the local level, and clear expectations regarding accounting and auditing. The expectation and encouragement of savings should also be a key feature. Although experience with grant programs in Africa is widespread, little effort has been made yet to focus grant programs specifically on the needs of young participants. In Sri Lanka, the Gemi Diriya program allocates a portion of its Livelihood Fund for the provision of one-time grants of US $46 to US $92 for income generation to help clients start an economic activity without incurring the risk of a loan (World Bank 2007a). The Gemi Diriya program focuses on young people among its targeted groups. Currently just over ten percent of participants are destitute young people (World Bank undated).

_Contracting arrangements to meet financial constraints._ A number of outgrower arrangements offer pre-financing of inputs and assured marketing channels. For example, Rabo Development (the parent organization of which is Rabobank) is active in Tanzania, Zambia, Mozambique, and Rwanda and provides management services and technical assistance to financial institutions that in turn finance supply chains including a range of agricultural clients. Participants include commercial farmers, those with little commercial presence, and an intermediate group of farmers with little present commercial engagement but ambitions to grow.

> 10 IFPRI and World Bank (2010) Brief 13.

> 11 The grants section draws from World Bank (2010).

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