It was a double celebration for the youth as the United Nations Development Programme (UNDP) and Stanbic Bank Uganda unveiled a new facility to promote impact-driven entrepreneurship, foster innovation and leverage business solutions to address the youth unemployment challenge in Uganda.
The five-year Youth4Business Innovation and Entrepreneurship Facility, initially capitalised with US$10 million of grant resources and up to US$200 million in concessional loans, was launched at a high-profile event presided over by Uganda’s President H.E Yoweri Kaguta Museveni, during celebrations to mark the International Youth Day at State House, Entebbe.
“I thank you so much, UNDP and Stanbic Bank, for the [Youth4Business Innovation and Entrepreneurship] programme. You deserve applause,” President Museveni said shortly before he, accompanied by First Lady Janet Museveni, appended his signature as a stamp of approval for the implementation of the initiative. This year’s International Youth Day celebrations was held under the theme, “Youth Engagement for Global Action”.
While observing that 68% of homesteads in Uganda are still living a subsistence life, according to the Uganda Population and Housing Census 2014 report, the President challenged youth to start enterprises and create wealth. “The modern youth must take part in waking up your family, village, area and yourself,” he said. “The medicine for poverty is enough money. Stop subsistence living, work for money,” he said.
The President stated that he had compiled a booklet showing opportunities for wealth creation in four key sectors of the economy; commercial agriculture, industry, services and information and communications technology (ICT). He encouraged the youth to seek these opportunities. Citing the traditional life of the native Banyankore people of western Uganda, the President said even in ancient times, they had specialised occupations (emyoga) like; cattle keeping, cultivation, blacksmith, pottery and carpentry.
He informed the nation that the Government of Uganda, is mobilising the youth to form manufacturing associations, to enable them receive funding from the Government for value addition and import substitution projects.
COVID-19 threatens youth ventures
The United Nations Resident Coordinator in Uganda, Ms. Rosa Malango, said a socio-economic impact analysis by the UN system in Uganda revealed that up to 60% of informal enterprises have stopped operations or moved below the poverty level due to the containment measures of COVID-19, denying income to between five and six million informal workers, most of whom are young men and women.
“The UNDP-Stanbic facility was created to enable businesses pilot innovative enterprise ideas on ways of delivering their services. The facility provides flexible funding mechanisms that will stimulate faster recovery of micro, small and medium enterprises that have borne the brunt of COVID-19," Ms. Malango said. The facility, she added, is expected to ensure skilling of 50,000 youths to increase their entrepreneurial success rate, create 20,000 new direct decent jobs for the youths and influence the creation of 100,000 indirect jobs.
On her part, the UNDP Resident Representative, Ms. Elsie Attafuah, disclosed that the Facility is part of UNDP’soffer to support the Government of Uganda deliver on the promise of the 2030 Agenda; to end poverty, eliminate inequality and social exclusion, and tackle climate change.
“It is part of our efforts to build forward better in a post-Covid-19 era,” Ms. Attafuah said.
She also applauded Quest Digital Finance Limited; and ChapChap Africa Limited, the two inaugural youth lead enterprises that were awarded US$ 40,000 each during the International Youth Day celebrations.
“These two enterprises are symbolic of the energy, creativity and ambition of the youth in Uganda and as UNDP and Stanbic, we commit to walk hand in hand with youth enterprises and with your Government to deliver a bright and prosperous future for the youth of Uganda,” she said.
Ms. Anne Juuko, the Chief Executive Officer (CEO) of Stanbic Bank Uganda, stated that the financial institution chose to partner with UNDP to provide a platform where youth can express their entrepreneurial ideas. “We shall provide capital for the youth to start, at a lower lending rate and, through our incubator, create capacity for the youth… give them good governance, business and technical skills so that they can compete,” Ms. Juuko added.
Goal 8 of the 2030 Agenda for Sustainable Development calls for the promotion of sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all. The UNDP in Uganda, under the Inclusive Green Growth (IGG) programme, has implemented several projects in the past to enable the youth access sustainable and decent work spaces. Such projects include the Uganda Graduate Volunteer Scheme, the Uganda Green Incubation Programme and the YouthConnekt Uganda.
About the Facility
The Youth4Business Innovation and Entrepreneurship Facility consists of three separate, but interlinked windows designed to boost the economic empowerment of youth. They include:
- Innovation Challenge Fund and Growth Accelerator that provides competitive matching grant awards necessary to spur impact-driven innovation by the youth and MSMEs in sectors where growth leads to jobs. The winners will each receive up to $40,000 in grant resources.
- Enterprise Challenge Fund which provides competitive blended finance (grant awards and concessional debt finance from partner financial institutions) to MSMEs with commercially viable businesses that address a defined key development challenge.
- Youth Entrepreneurship and Innovation Ecosystem platform which will revitalize youth networks including the YouthConnekt Uganda, to collectively identify and tackle systemic issues impeding the social economic empowerment of young people.
- The winners will be complemented with technical assistance for two years from the Stanbic Business Incubator and mentorship from the UNDP Accelerator Lab to foster the nexus between business development services and development solutions.
At the center of this initiative is UNDP’s abilities to innovate, elevate development effectiveness and efficiencies to scale, multiply the impact of results, maintain class-leading transparency and provide effective oversight and accountability.
About the pioneer winners:
1. Quest Digital Finance Limited operates Akellobanker, a data-driven mobile and web-based digital platform that enables low-income earners including farmers, youth, women and disabled persons to access mechanized agricultural services, improved seed and medical services on credit. Akellobanker offers easy access to tractor hire, improved seed, medical services and farm labor on credit, by leveraging data and mobile technology to offer structured re-payments compatible with the user's needs. The platform integrates mobile money to facilitate instant access, disbursements and repayments. The technology uses the historical data collected to generate unique credit identities, which track the user credit behavior to assign appropriate credit scores.
Quest Digital Finance Limited is proposing as a solution, the “Akellobanker” which is an analytics-based mobile and web platform that facilitates easy access to farm inputs, expert-extension services, agro-advisory services, tools and equipment for farmers while providing an option for smallholder farmers to pay, share or hire farming services or equipment on credit. Akellobanker will connect smallholder farmers to agricultural service providers such as input dealers, extension workers, agro-advisory services and lenders using a low-cost, data-driven, user-centered approach. Quest Digital Finance’s model will de-risk farmers at the cooperative or group level and allow providers and lenders to reach millions of farmers at a fraction of the cost of expansion.
2. ChapChap is a fintech and social venture looking to improve the livelihoods of low-income individuals and businesses by addressing market failures that result into exclusion of low-income persons from participating in productive financial activities. ChapChap leverages versatile innovation, digital and mobile technology to unlock access to gainful employment, trade, affordable credit facilities and low-cost financial services, thereby enabling last-mile low-income consumers access goods and services. The company builds a coordinated network of micro, small and medium enterprises and uses their combined strength to create lasting impact in the communities they serve by becoming access points for a wide range of products and services.
ChapChap is proposing a mobile powered platform to improve livelihoods by facilitating equitable participation of low-income earners in trade, finance and economy by enabling access to financial services like affordable electronic payments infrastructure, mobile money agency banking services, unsecured micro credit and remittance services by individuals and MSMEs. In addition, the solution is embedded with a business management solution that enables small business owners make the right decisions for their businesses by accessing vital information in real time so that they increase the productivity and sustainability of their businesses.
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