KENYA

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KENYA
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Unleashing Potential, the Kenyan Experience
A PRESENTATION BY HON. DR. PAUL NYONGESA OTUOMA,
MINISTER FOR YOUTH AFFAIRS AND SPORTS,
KENYA 09th ,May 2011
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THE YOUTH IN KENYA
79 of Kenyas population is 35 years and below
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47 are below 18 years old
Kenyas median age is 18.8 years
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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

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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

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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

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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

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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

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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 2008.
• If the Fund is to be sustainable financially it
  is expected to have

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FUNDS 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.

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MANDATES, PRODUCTS SERVICES
1. LOANS

• 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.

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Skilled youth have taken loans and established
small workshops
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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

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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.

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Entrepreneurship training
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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.

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Youth exhibit products in a YEDF organized fair
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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.

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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

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Many youth trade poor conditions
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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

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ME 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.

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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
  Funds resources
• Financial institutions are now introducing youth
  focused products

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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.

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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

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Political goodwill is key to success of youth
programmes
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THE ROAD AHEAD-LINK WITH KENYAS 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.

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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

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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 .

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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

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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

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THE FUTURE

• Place more emphasis on infrastructure development
  youth employment n scheme abroad

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