Category Archives: Youth Funding

Entrepreneurs get support from UBA Foundation and Kenya’s Youth Fund

The UBA Foundation and the Youth Enterprise Development Fund in Kenya have signed a partnership to support Kenyan entrepreneurs who participate in the fourth cycle of the Tony Elumelu Foundation entrepreneurship development program.

The UBA Foundation is the CSR arm of the UBA Group, a pan-African bank that is in 19 countries. It focuses on economic empowerment, education, and the environment, while the Tony Elumelu Entrepreneurship program is a flagship of the Tony Elumelu Foundation (TEF) . The program is an investment of $100 million that aims to nurture 10,000 African startups to create 1 million jobs and generate $10 billion in revenue growth over ten years. This will be through funding, training, mentorship, counseling and networking for the startups to trade across Africa and beyond.

Entrepreneurs apply to the TEF and Youth Fund.

The CEO of the Youth Fund Josiah Moriasi said the organization had advanced Kshs 12.2 billion to 1.4 million Kenyans through their core products such as LPO financing, talanta loans (for creatives), and startup loans. Ronald Osumba, Chairman of the Youth Fund, said that while the Fund had been in the news for some wrong reasons, it had also supported many young successful people,  not just with finance, but also business support, market linkages, and business spaces.  They were also working to reduce the failure rate of startups through market aggregation models in counties around the country.

This year the TEF program is already seeing a record number of entries from 54 countries since the window for applications opened on January 1.   It runs up to March 1, 2018, for applicants to submit their startups or business ideas and the selected entrepreneurs  will participate in the 2018 cycle that runs from May 1 to December 2018. 

The Tony Elumelu Foundation program has 3,000 alumni now, and over 200 Kenyans have benefited from the program, each having received $5,000 (~Kshs 500,000) as seed capital for their businesses which they have then used to scale and grow into other product and service lines. This year, UBA Kenya officials hope to enroll more Kenyan in the program as the country has run a distant second to Nigeria in past applications and enrollment.

The application process is rigorous but it pays off. TEF entrepreneurs get twelve weeks of training, mentorship, $5,000 of seed capital and access to the alumni network and further funding opportunities.  Kenyan entrepreneurs who complete the application to the TEF site can also apply to the Youth Fund for another $5,000 in matched funding.

Kenya Government DFI merger plan

This week came a report of circular regarding the merger of several government banks and development finance institutions (DFI’s). The institutions targeted to form the mega development bank include the Kenya Industrial Estates, Uwezo Fund, Youth Enterprise Development Fund, Women Enterprise Development Fund, Development Bank of Kenya and Industrial Development Bank of Kenya.

Earlier, a Report of The Presidential Taskforce on Parastatal Reforms that was presented to President Kenyatta in October 2013 had proposed merging Kenya Industrial Estates, IDB Capital, Industrial and Commercial Development Corporation, and the Agricultural Finance Corporation. The rationale was that they were all fragmented, sector-specific, ineffective DFI’s with overlapping mandates that should be merged into a Kenya Development Bank (KDB). The committee also proposed the creation of a new Kenya Export-Import Bank (Kenya EXIMBANK) to promote Kenya’s exports through the provision of export and import finance and related supporting activities.

This is not new, but a variation of an older plan to merger government-owned, or controlled, banks. It now excludes two banks that may or not be in talks – KCB has been linked to a move to acquire National Bank. It also leaves out Consolidated Bank, the Kenya Tourism Development Corporation, and the Agricultural Financial Corporation, but now includes new government entities that have been created to advance funding to special groups like industrial entrepreneurs, women and youth entrepreneurs.

But speaking at an event launching a partnership between the Youth Enterprise Development Fund and the UBA Kenya Foundation, YEDF Chairman, Ronnie Osumba,  said that the pending DFI merger would take into consideration the continuity of all ongoing affirmative action fund programs.

The Youth in Kenya

Yesterday saw the launch of a book entitled “Youth In Kenya: A Ticking Time Bomb” which is co-authored by a friend. The book looks at the challenge and job opportunities for the youth in Kenya, in terms of incentives, appropriate skills, cost of business, and new jobs for the youth, who one guest described as only interested in watching English soccer matches in the villages.

Youth in Kenya coverSome excerpts 

  • Kenya’s education systems was designed by the British to be a source of raw material and cheap labour.
  • Education CS Fred Matiangi: No other sub-Saharan Africa has put the resources in education that Kenya has in 50 years, and with 290 technical education institutions, there will be one in every constituency.
  • George Njenga: There are over 70,000 skilled Kenyans working in South Africa. It is important to look at the training of teachers, so that they also impact good foundation and lessons to the youth and Strathmore Business School has started on that.
  • Jonathan Mueke: There have to be standards in the Jua Kali sector – thousands of people produce hoes (jembes) that won’t dig, and which Nakumatt (a large supermarket chain) cannot sell
  • FT Nyammo: We have thousands of available jobs to be done in the coffee, tea, and dairy sectors in rural Kenya, but no youth are willing to do them as they consider them to be menial. Also, the Jua Kali sector provides 80% of employment when the economy is good, and the government should channel incentives there to create more Manu Chandarias! (one of Kenya’s most renowned industrial entrepreneurs)

One of the books’ main authors says he was inspired by media stories from last July, which described the Kenya Judiciary and Ports Authority as being were overwhelmed by job applicants; some had received 80,000 applications for 1,000 jobs advertised and even had stampedes at their offices.

The book was published by Longhorn and sells for Kshs 900  ($10). It’s a non-academic book edited for everyone to read.

Youth in Kenya: book launchAside from this, last week,  the KCB (Bank) Group launched “2JIAJIRI”, a KShs. 50 billion job creation program under they committed to “set aside Kshs.10 billion annually in the next five years towards driving this enterprise development programme over the funds which will be used largely to support small and medium businesses run by the youth.” They hope to “reach 500,000 entrepreneurs (both existing and new ones) in 5 years, thereby creating at least 2.5 million direct and indirect jobs.”

 

Funding Youth & Women Enterprises In Kenya

Today, it became news that the government would no longer extends funds to  youth and women  programs. So far, the government has distributed more than Kshs 10 billion (~$10 million) to youths and Kshs 7 billion (~$70 million) to women.

Chase Bank Youth & Women FundsThe ending was not really new as a previous report released by the Central Bank of Kenya in 2015 noted that “the intention was not for the Government to lend, but to create an incentive for banks to engage with SMEs”.  Chase Bank Youth and Women Funds

Looking at financial results of two banks that had bond issues in 2015, and for which they released detailed information memorandums (IM’s), these show the flat or declining status of the youth and women fund programs. Both Chase, and Family, banks were intermediaries in the incentives by the Youth Enterprise Fund and the Women Enterprise Fund to advance funds to the respective target groups.

Family Bank Youth & Women FundsThat does not mean that the Kenya government has stopped supporting entrepreneurs in the sectors, as there’s now the Access to Government Procurement Opportunities (AGPO) initiative under which the government aims to allow 30% procurement contracts to be given to the youth, women and persons with disability without competition from established firms.