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The New Year gift of enterprise development fund
4th Jan 07

Gazettement of the youth enterprise development fund is a welcome New Year gift to aspiring, young entrepreneurs.  The fund could be now operational from as early as this month.  It is notable however, that similar efforts of developing the welfare of the youth have in the past not even taken off. They have been overtaken by political greed and other vested interests.  This has resulted to natural failure which this writer has no interest in exploring into.

Many Kenyans all over the country are skeptical about the genuineness of the current efforts based on the past. But, it appears that the current one is not an exercise in futility.  One assurance for example is that there will be no politics involved in the fund.  It will be serious business by the government this time.  This appeared obvious to this writer from the day the idea of the youth fund was floated in the budget of 2006/2007. Through a research that has since been presented in an international entrepreneurship conference, this writer had gotten innumerable insights into the global development of Small and medium Enterprises (SMEs), which are interchangeably referred to as  referred to as small business. Participation in the international conference exposed the writer even further. Information about similar enterprise or entrepreneurship development efforts that have been put in place not only in other African countries but also other parts of the world came to light. Some of the efforts have been success stories while others have been edging towards collapse, or have even totally failed.
 
The efforts have been directed towards fueling development of small businesses.  It is these small businesses that are now recognized as the engine of growth of the world through employment and wealth creation.  The end result is reduction of poverty levels, thus improvement of the welfare of humanity. In this realization, the Youth Enterprise Development Fund in Kenya is a definitely commendable effort which must be made to work.  For some reasons many people knew that this writer has a special heart for SMEs.  He had personally interviewed many business people in Nairobi, while conducting the research earlier mentioned.  He in addition is well endowed with clear understanding of the intricate details of doing business in Kenya.  For these reasons, the writer received many enquiries on strategies towards benefiting from the new efforts of developing entrepreneurship.  Further, there were many public debates in social places, churches, homes, government offices, political forums and also the press.

Nobody could come up with any definitive approach of implementing the YEDF.  The thought of failure of this effort disturbed the writer’s conscience. He had almost no interaction with Government authorities except when remitting the usual regulatory dues. Sharing of information with the authorities would have been an unlikely occurrence. Nevertheless, the writer felt he had something to offer by whatever means. After some time, the writer could not help developing a concept paper commonly known as a proposal. The emphasis was on how the government can develop entrepreneurship through encouraging the youth to embrace self-employment now that funds were going to be availed. According to the majority, there should be no excuse for the youth not to venture into business, more so once the anticipated funds become available.  But the concern was and still is that; do the fund targets have the right attitude towards business or self employment? Do they have entrepreneurship culture engrained in them? How could they just jump into business only because funds are now available?

These questions kept lingering in the writer’s mind as he prepared the proposal.  Inevitably, he had to include entrepreneurship training as a major component of the proposal. There is more to business than Money. It is just one of the resources. He therefore impressed upon the government the need to train prospective entrepreneurs not only on business development process but also adoption and growth of entrepreneurship culture. Eventually, the writer forwarded the proposal to the Permanent Secretary, Ministry of Youth Affairs. But, before the proposal was properly conceived, the writer met with one of the senior officers in the ministry. The officer felt that the writer was out of touch with reality for impressing upon them to embrace entrepreneurship training as a component of requirements of the youth fund.  He wondered who would be trained and how it could be approached. Given his attitude, the writer couldn’t get far in justifying his contention. He therefore gave time for all concerned to read the proposal first after which there could be discussions.  The writer is now proud to report that the patriotic gesture is now paying. The ministry saw the writer’s points of view. All the recommendations were considered with the necessary seriousness. Even the step-by-step approach of funds disbursement through banking Institutions coupled with the management structures were given serious consideration.  

The writer is always elated whenever he reads in the press about the implementation measures under consideration by the authorities of the Youth affairs Ministry. There is pride in having offered a hand to the government at no cost. The time spent and free sharing of knowledge is a small price to pay for our dear country.  Many have lost their lives and property for the sake of this country. The press and in particular The Kenya Times covered these efforts on 19th and 24th September 2006.  After this, the writer got confirmation to the effect that his recommendations had been largely adopted.
In the meantime, the new efforts by the Government could have far reaching effects. Fixing of an upper limit of 7% lending interest rate could severely shake the banking industry in the long run. They have profiteered for many years through fixing interest rates at will. The YEDF will also most likely benefit the older entrepreneurs. It is not able that 25 % of the latter will be allowed to join hands with the youth to form business ventures. They will perform mentorship roles to the youth ventures. What will prevent a parent from teaming up with his/her children aged 18-35 years, to borrow from the YEDF and form mutually beneficial business ventures?

To cushion the effect of the YEDF, the banks had better strategize in developing the equivalent of the YEDF for the older entrepreneurs and general business community. The lending rate must be competitive to accommodate all. That means the YEDF is likely to bring down commercial banking interest rates. Even if the industry players say that the YEDF is only Kshs I billion, many offshore poverty eradication stakeholders are waiting in the wings to boost the governments efforts.  

Meanwhile, the benefits of the YEDF may not be realized immediately. As has been noted before, entrepreneurship is a slow process.  It calls for patience, commitment, creativity and risk taking amongst other factors. The beneficiaries must open their eyes wide. There are many opportunities of doing business resulting from recent economic developments. The Constituency Development Fund (CDF) activities are major sources of opportunities. Others are off-shoots from different sectors of the country’s economy which, are seemingly back on their feet. A case in point is agriculture and tourism which had earlier been on their deathbed. Business knowledge is however mandatory. Research has indicated that past success rate in start up businesses has been a paltry   15 % in the first 5 years.  To correct this situation, entrepreneurship skills must be embraced by all.  Entrepreneurship is the force that drives business, whereas strategy process helps in management of change. Have you ever wondered why America is today a world leader in industrialization? Besides is YEDF not one of the seeds of delivering VISION 2030? Have an informed New Business Year.

Newtimes Editor

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