Inclusive finance: three models vying for the Luxembourg award

Chancen International, Fundación Paraguaya and iFarmer offer three different ways to support young people: financing training based on future income, combining credit and mentoring, or supporting an agricultural business. The prize winner will be announced on 12 November at the EIB.

Financing studies with no upfront payment, combining a loan with support to tackle poverty, or giving a small-scale farmer access to inputs and markets: three very different ways of bringing young people closer to financial services will be highlighted in Luxembourg. The winner of the 2026 Luxembourg Award for Inclusive Finance will be announced on 12 November at the European Investment Bank (EIB), following an international selection process.

The award ceremony is part of Inclusive Finance 26 (IF26), an event dedicated to inclusive finance taking place from 11 to 13 November at Neimënster Abbey and online. This year, the award focuses on the financial inclusion of young people.

Three responses to different needs

The finalists are Chancen International, based in Rwanda, Fundación Paraguaya, in Paraguay, and iFarmer Ltd, in Bangladesh. Their models address different circumstances. The first aims to finance training based on the graduate’s future income; the second combines financing, learning and support; the third links agricultural credit, inputs, advice and market access.

This diversity is central to the issue. A young person unable to pay training costs upfront has different needs from a student with no credit history or a farmer who needs to finance their business before the harvest. Financial inclusion is therefore not simply a matter of opening up access to a loan: the services on offer and the repayment terms matter too.

The award received 95 applications from 43 countries, according to its organisers. After several assessment stages, a selection committee chose ten semi-finalists, then the three organisations in the running for the main prize. Applications were assessed in particular on how well they understood the difficulties faced by young people, their services, client protection and the monitoring of results. This selection highlights approaches considered worthy of study; it is not, in itself, an independent comparison of their impact.

Chancen: repaying according to income

Chancen International finances employment-focused training for young people aged 18 to 35. Its mechanism is based on an income-sharing agreement: beneficiaries pay nothing upfront and do not need collateral or a guarantor. Repayments begin only when their income exceeds a defined threshold; the amount then varies with that income and ends after a set period.

The mechanism links repayments to the income earned after training, rather than setting a fixed instalment unrelated to salary. This does not mean the training is free: if the terms of the agreement are met, repayment is required. The specific terms, including the threshold and duration, depend on the programme concerned.

Chancen supplements the financing with financial education, job preparation and wellbeing support, and works with selected training providers. The aim is therefore to link access to learning with the transition into employment, rather than financing training in isolation.

Fundación Paraguaya: combining credit and support

Founded in 1985, Fundación Paraguaya works in particular with young people aged 15 to 30. Its approach brings together microloans, student loans and education financing, as well as vocational training, entrepreneurship and financial education. Village banks and activities run in agricultural schools are also among the initiatives presented by the organisation.

One key tool, the Poverty Stoplight, invites participants to assess different aspects of their living conditions themselves and identify the difficulties they want to address. Mentors then support them through this process. This self-assessment can help organise follow-up around multiple needs; by itself, it is not an independent measure of having escaped poverty.

This follow-up therefore goes beyond the relationship between a lender and a borrower. In the model presented by the award organisers, financing is a tool combined with training and work on living conditions.

iFarmer: financing an agricultural business

iFarmer, a fintech company founded in Bangladesh in 2019, works with small-scale farmers in 42 districts, according to the award application. Its model combines working capital, agricultural inputs, advice and links to markets. It brings together physical centres and local support with digital tools.

On a farm, spending on seeds and other inputs can come before the harvest and its sale. Working capital financing addresses this cash-flow gap, while advice and access to markets tackle other obstacles to the viability of the business.

iFarmer says that farmers under 30 make up a significant share of its client base, but not all of it. Its approach therefore serves farmers of different ages, while taking into account the particular difficulties faced by young people with little collateral or credit history. The combination of digital tools and a local presence aims to connect these groups with financial and agricultural services.

A Luxembourg award, international models

The Luxembourg Award for Inclusive Finance, formerly the European Microfinance Award, was launched by the Luxembourg government. It is jointly organised by the government, the e-MFP network and the Inclusive Finance Network Luxembourg (InFiNe). The 2026 winner will receive 100 000 euros; each of the other two finalists will receive 10 000 euros. These sums reward the organisations, not the young people who use their services directly.

Alongside the award ceremony, IF26 also addresses gender-, climate- and emerging technology-related financing. The award’s annual publication is intended to present the semi-finalists’ models and the lessons learned from their applications.

The three finalists thus raise a more concrete question than simply access to credit: which service addresses which obstacle, and on what terms? The answer varies depending on whether the aim is to finance training, support a broader economic journey or enable a farm to operate. It is this difference between the models, as much as the name of the winner, that makes the selection announced in Luxembourg interesting.