COMMONWEALTH YOUTH PROGRAMME AFRICA CENTRE

COMMONWEALTH SECRETARIAT

Youth Enterprise Development and Youth Employment Experiences and Lessons from

Commonwealth Africa

ENIWET KAKUWA

AIMS:AIMS:

•integrated package of low cost

•easily accessible credit

•enterprise training

•development to young entrepreneurs

The programme aims to provide:

OBJECTIVE:• To promote the development of sustainable micro enterprise employment among young people• To promote economic growth and national development

• To demonstrate a model of good practice in micro credit for young people• Attracting the interest of donors, governments and other development agencies in youth enterprise development

KEY FEATURES OF BEST PRACTICE INITIATIVES:

• Training provided and loans distributed by NGOs with experience in micro- credit and enterprise

• Group lending and use of group savings as collateral against loans to ensure repayment

•Democratic participation by beneficiaries

•Entrepreneurial development and management training as a prerequisite for participation

•Provision of information and support services

•Business support services to young business entrepreneurs

GROUPS:GROUPS:

THE SAVING CLUB

THE BUSINESS PLAN

THE CONTRACT AND REPORTS

THE LOAN

LOAN DELIVERY

LOAN REPAYMENT

SAVINGS

SUSTAINABILITY

INSTITUTIONAL ARRANGEMENTS

ADVANTAGES OF THE MODEL

• Promotes self- employment option for young people

• Self- supporting

• Entry into the commercial network for young people

• Implementation costs spread over a no. of agencies/ covered under the programme

• Necessary input is political will to commit government to supporting YED programmes through development of policy frameworks and budget allocations

• Applies strict commercial disciplines and leaves all partners better equipped to counter poverty

• CYP encourages governments to create policy and institutional structures and flexibility in legal and banking systems

• CYP provides information, materials, advice and technical assistance

LESSONS FROM THE PAST:LESSONS FROM THE PAST:

• Use an agency with experience in enterprise training or credit delivery

• Implementing agency selected on basis of political neutrality, institutional capacity, commitment, innovativeness, flexibility in accounting for local conditions

• Inappropriate to select government agency to implement programme

• Need to provide orientation training to staff

• Regular consultations and checks with partner NGO necessary to ensure implementation of project is smooth

• Provision of youth exchange activities is essential to facilitate sharing of best practices among young people in running sustainable enterprises

• Regular monitoring and evaluation of programme is needed

CHALLENGES:CHALLENGES:

• Allocation of funds are not proportional to magnitude of youth unemployment

• Little effort at monitoring and evaluation of programmes

• Personnel lack skills, experience and awareness

• Cumbersome loan transactions

• Wider acceptance of potential of youth enterprises needed

SUGGESTIONS:SUGGESTIONS:

•Level of borrower who lacks experience with credit institutions

•Level of financial organizations not pre- disposed to lending to youth

•Level of existing regulations

•Inadequacy of loan- able funds, strict collateral requirements, and negative attitude of some lending institutions towards youth borrower

IMPROVE PERFORMANCE OF YED PROGRAMMES AT FOUR LEVELS-

ADDITIONAL SUGGESTIONS:ADDITIONAL SUGGESTIONS:

• Refine group guarantee mechanism to reduce risk of defaults

• Direct credit to economic activities in which youth are most active

• Mobilizing capital for youth activities

• Incorporating flexible repayments for small loans

• Promotion of YED programme in decentralized manner

• Incorporation of purchasing and/or marketing systems

• Need for National Enterprise Policy in informal sector to enable young people to access credit facilities, infrastructure and so on

• Partnership between private sector/ business community in mobilising resources and providing business support services

•YED policies need to be put in place in Africa to integrate efforts into national economies

• Undertake appropriate legal reforms

•Linking potential youth enterprise programmes with capital by strengthening capacity of major institutions and capacity building