KENYA
Unleashing Potential,
the Kenyan
Experience
A PRESENTATION
BY HON. DR. PAUL NYONGESA OTUOMA,
MINISTER FOR YOUTH AFFAIRS AND SPORTS,
KENYA
09th ,May 2011
2
2
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
2008.
 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
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.
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
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

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