Social media: Banking on youth to spur economy through SMEs
Henry Rithaa
In an article shared widely on social media recently, hundreds of university graduates showed up for interviews at Nairobi’s EKA hotel which had advertised some five vacancies. The hotel did not anticipate such a huge turnout.
However, on the material day, jobseekers started streaming in as early as 5am and by 8am, the hotel compound was fully occupied, with some forced to wait outside.
The EKA hotel incident is not isolated. It is replicated every day in companies throughout the country whenever employment opportunities are announced. The huge number of jobless youths chasing limited employment opportunities is a sobering reality in a country with about 800,000 young Kenyans entering the job market every year.
According to a 2018 World Bank report (the Kenya Poverty and Gender Assessment), youth unemployment is almost double that of the total population. In addition, many young people are underemployed, and work in low productivity jobs.
And according to a report by the Overseas Development Institute, Kenya needs 600,000 new jobs each year until 2030 in order to provide opportunities for young people entering the labour market.
Small Medium Enterprises can be a perfect remedy to high levels of unemployment, but research by the Central Bank indicates that about 46 per cent of SMEs close within a year of founding, and another 15 per cent in the year after that.
This happens despite Kenya being ranked 61 out of 190 economies in the ease of doing business. The question then is, why is it that small businesses seem not to enjoy a similar reality? Where is the mismatch?
One of the main challenges facing young entrepreneurs in Kenya is the lack of financial capacity to start and upscale business ideas to the next level, which is critical in sustaining their businesses.
Over the years, many young people in Kenya have come up with brilliant and innovative business ideas, but sadly, the ideas have not been incubated and harnessed into scalable strategies with the capacity to create employment opportunities. As a result, many innovative business ideas that have the potential to spur job opportunities die at their formative stages, or at later stage due to myriad challenges.
It is for this reason that the government has partnered with the World Bank to launch a national business plan competition meant to support and spur youth entrepreneurship.
The competition was borne out of the realisation that many young people have innovative ideas, but they are bogged down by the prohibitive cost of doing business, among other myriad challenges.
Dubbed “MbeleNaBiz Business Plan Competition” the contest will run throughout all the 47 counties and will award 750 successful applicants grants from Sh900,000 to Sh3,600,000 to upscale their businesses to the next level and create employment opportunities. A cohort of the successful applicants will also be provided with training on business plan preparation.
The competition is an initiative under the Kenya Youth Employment and Opportunities Project (KYEOP) and is implemented by the Micro and Small Enterprises Authority (MSEA) and the Ministry of Public Service, Youth and Gender Affairs. KPMG has been brought on board to manage the contest.
The competition will accept applications from new and existing youth-led business enterprises. Applications from young Kenyans living in the diaspora will be accepted if their proposed businesses operate in Kenya. A key criterion in the evaluation of the applications, will be their potential for job creation among youth.
Young entrepreneurs with great business ideas are encouraged to enrol in the competition and share ideas. By investing in young entrepreneurs whose ventures will generate employment opportunities and earnings for other youth, the competition will contribute to the development of an inclusive economy that provides opportunities for as many Kenyans as possible. The writer is the CEO, Micro and Small Enterprises Authority —[email protected]
