COMMONWEALTH YOUTH PROGRAMME AFRICA CENTRE COMMONWEALTH SECRETARIAT Youth Enterprise Development and Youth Employment Experiences and Lessons from Commonwealth Africa ENIWET KAKUWA

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: 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: 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: 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: 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: 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