Youth in Kenya are experiencing much higher unemployment rates than the rest of the Kenyan population.
In 2014, Munga and Onsomu, reported that youths aged 15-19 and 20-24 years had unemployment rates of 25 percent and 24 percent respectively. This is approximately double the overall unemployment of 12.7 percent for the entire working-age group. Despite this, Kenya's youth are slowly transitioning from the risk averse mentality; that is, one has to be employed and depend on a monthly income in order to earn a living.
The rate at which Kenya's youth are coming up with new business ventures, and starting their own small, medium enterprises is rather impressive.
This is important because most economies of the world are tremendously boosted by the growth of small and medium enterprises. That said, there are factors that are slowing down this growth potential in Kenya. Many feasible business ideas and opportunities are failing due to solvable problems.
The problems include;
- lack of access to credit,
- tedious and corrupt registration systems,
- unclear certification processes and
- inadequate business skills.
When these are addressed, many doors shall open for the thousands of young entrepreneurs in Kenya who shall in turn shall create thousands of employment opportunities for other youth.
Traditional financial institutions have, in many instances denied credit services to the youth, difficulty in assessing and managing their risk profiles, lack of collateral and lack of the required financial documentation.
To properly manage an individual’s risk profile, it would be necessary to impart relevant knowledge at an early stage of the young person educational life. Financial and information technology knowledge would come in handy. Platforms such as a mobile applications would help generate their financial profiles and making it easier for them to be appraised. The individual would present such records to financial institutions, and make it easier for them to be considered for credit.
The application should also be able to create financial projections for the SMEs. When one downloads the App they should be able to enter their business particulars, including; goods they are trading in, sales targets, actual sales, costs, unit prices, sale date, among others.
In addition, the individual should be attached to business incubation and acceleration institutions where critical business skillsare provided. Youth equipped with internet access and Apps on their smart phones, would access latest information on loans, tenders, grants, markets, incubators and networks. The above will also enable financial institutions to see the potential of these startups and easily offer them credit services.
With the right consultants, adequate finances and the right partnerships, the above would enable Kenyan entrepreneurs to realize many of their business ideas, grow their existing businesses and create even more opportunities for their fellow youth.
Cover Image, Strathmore University
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