KENYA

2 2 A PRESENTATION BY HON. DR. PAUL NYONGESA OTUOMA, MINISTER FOR YOUTH AFFAIRS AND SPORTS, KENYA 09 th,May 2011 Unleashing Potential, the Kenyan Experience

THE YOUTH IN KENYA 79% of Kenya’s population is 35 years and below

47% are below 18 years old Kenya’s median age is 18.8 years

IN SUMMARY Kenya is experiencing a youth bulge The unemployment rate is 40% Over 60% of the unemployed are youth Many youth are now educated, thus raising their expectations The government is not taking this matter lightly

BACKGROUND Government has started several youth focused programmes to tackle unemployment These include: – Establishing Youth Enterprise Development Fund – Expanding National Youth Service – Labour intensive public works programmes – Expanding vocational skills training

Youth Enterprise Development Fund Started in 2006 Aimed at spurring entrepreneurship among youth To provide youth with opportunities to become job creators Was started with an initial capital of USD 13 million Started as a department of Ministry of Youth Affairs

LEGAL FRAMEWORK Broadly established under the State Corporations Act, Cap 446 of the laws of Kenya.In 2007 the Fund was transformed into a state corporation (semi-autonomous); established under a presidential decree The Ministry is working on a sessional paper to anchor the Fund in law The Fund is also envisaged in the national youth policy

INSTITUTIONAL ARRANGEMENT The Fund is run by a board appointed by the minister as per the law The Fund is fully funded by government, currently to the tune of about USD 40 million. Kenya has other funds targeting SMEs but Youth Fund focuses on Youth

FUNDING Further USD 30 million has been raised through leveraging agreements with financial institutions that have agreed to match the government money with their own funding since October If the Fund is to be sustainable financially it is expected to have

FUND’S SUSTAINABILITY A core capital base of at least USD 195 million (Kenya shillings 15 billion ) This is envisaged to be raised from both local & external funding sources. This funding is supposed to directly finance the core programme areas key being lending & commercial infrastructure.

MANDATES, PRODUCTS & SERVICES The Fund provides loans to individual youth and groups; either directly through constituency loans or via intermediaries. Loans target startups and expanding enterprises To date loans worth USD 40 million have been disbursed via intermediaries, while USD 7 million have been disbursed via the constituency loans. So far the Fund has financed 95,000 youth enterprises via the intermediaries and 9000 youth groups through the constituency loans. The individual loan products were introduced to incentivise youth to pay up their initial loans. 1. LOANS

Skilled youth have taken loans and established small workshops

2. BUSINESS DEVELOPMENT SERVICES The Fund provides pre disbursement training prior to loans being disbursed Equally the Fund provides, networking forums, mentoring services & targeting business development services either directly through its own staff or

CREATING ENTERPRISE Through consultants. The Fund through its advisory services helps young people to identify busyness opportunities in different parts of the country. This aspect of creating enterprise is a very critical factor in risk mitigation and ensuring a higher survival rate of the new businesses.

Entrepreneurship training

3. MARKET SUPPORT The Fund supports youth to market their products & services.This is through organizing youth trade fairs at district, provincial and national levels; and also facilitates participation in regional & international fairs. The Fund intends to hold these fairs in all the counties as from next year.

Youth exhibit products in a YEDF organized fair

4. LINKAGES The Fund links youth enterprises to large enterprises This provides youth enterprises with: ◦ Market for products ◦ Technological transfer ◦ New business strategies The Fund is also facilitating youth through: franchising; subcontracting etc.

5.COMMERCIAL INFRASTRUCTURE Youth enterprises lack access to decent working premises/trading space The Fund is working with both public & private partners to promote investment in youth focused infrastructure such as: – Market stalls – Business incubators – Business/industrial parks

Many youth trade poor conditions

6. JOBS ABROAD The Fund is working with employment agencies to identify jobs opportunities abroad. The current target is 10, 000 by end of 2011, and have managed 3000 so far. The Fund provides: ◦ Pre departure training ◦ Migration loans ◦ Linkage to govt. departments providing travel documents

M&E MECHANISM Tools have been developed to guide field officers and partners Reports are received quarterly Loans to intermediaries are given in tranches, hence all reports must be verified through field visits before releasing any subsequent tranches.

WHAT WORKED WELL? Partnership with communities has helped us succeed Many youth have started or expanded enterprises Many youth are now mainstreamed into financial services Financial institutions are now leveraging the Fund’s resources Financial institutions are now introducing youth focused products

LESSONS LEARNT Youth are creative, energetic, flexible and are able Working with youth requires patience and empathy The youth are bankable Not all youth are interested in entrepreneurship,hence others must create the jobs for them.

LESSONS contd. Government alone cannot solve the youth problem Partnering with private sector helps unlock immense resources We must keep renewing our products/services to respond to changing needs

Political goodwill is key to success of youth programmes

THE ROAD AHEAD-LINK WITH KENYA’S VISION  Kenya has a vision dubbed Vision 2030, that envisages a globally competitive & prosperous nation by the year 2030, with an annual economic growth rate of 10%  This vision is anchored in three pillars i.e. economic, political & social.  Under the social pillar the Youth Fund is a flagship project and hence the need to create enterprise.

ROAD AHEAD (contd’)  Vision 2030 envisages opportunity & empowerment  This the Government through the Fund will: Enhance engagement with both public & private partners to create opportunities Increase accessibility of the Fund via devolving its structures

THE FUTURE Enhance enterprise through partnering with various institutions of learning to make it demand driven as opposed to supply driven Fast track the creation of an appropriate legal frame work All government ministries & departments to implement youth programmes.

THE FUTURE Aggressively pursue other development partners to provide funding Because the solution does not lie in relegating our duty to an intermediary, the Fund will seek to take back a bigger role of the functions of the intermediaries. To operationalize the government directive of securing 10% of all

THE FUTURE Government procurement to youth owned enterprises To establish a credit guarantee scheme to ensure that youths access bigger loans and facilitate them supply both in government and private companies Structure the current loan products to offer long term financing to spur real economic growth with greater impact

THE FUTURE Place more emphasis on infrastructure development & youth employment n scheme abroad

We are up to the task! We shall meet the aspirations of Kenyan youth

ASANTENI SANA