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Entrepreneurship and innovation are key to addressing youth unemployment

Watu Africa is an asset financing company revolutionising financial inclusion and mobility for millions in Africa

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By Erick Massawe

It is projected that by 2030 the number of youth will rise by 7%, to almost 1.3 billion. Africa touted as the continent of the youth will have over half a billion people aged between 15 to 35 years.

They are touted as the future of the world economy and increasing their capabilities, guiding them to play their rightful role in an ever-evolving world has become a constant topic of discussion in local and global fora.

Youth face a number of barriers to business creation and self-employment hence the growing emphasis to empower them through entrepreneurship coaching and training, start-up financing and business incubation programmes.

The United Nations has it that, worldwide, 30% of young women and 13% of young men are not engaged in employment, education, or training. Estimates suggest over 95% of all young workers are part of the informal economy in developing countries.

Safeguarding their social and economic development is a key factor in the interventions being rolled out worldwide.

UNICEF says that across Kenya, 85 percent of unemployed people are younger than 35. An alarming rate exacerbated by a growing population and labour force, a skills mismatch, declining economic growth, and skewed labour market set ups.

Most of these youths have decried lack of access to capital to start businesses, credit and business mentorship as the major drawback to becoming entrepreneurs. An existential threat which the government and other societal decision makers are grappling with.

It calls for urgent action in supporting initiatives and programs that youths in Kenya can embrace and use to provide their sources of livelihood. There is a need for incentives that will grow young entrepreneurs.

These incentives should include waiver of business registration costs and business licensing costs, and establishment of a registration desk exclusively for the youth at all Huduma Centres. This should be coupled with provision of adequate training on business financial management, planning, and information technology platforms.

According to the Financial Sector Deepening (FSD) estimates, 23 percent of people aged between 18 years and 25 years in Kenya are excluded from financial services and few financial service providers in developing countries specifically target the youth.

In a rapidly changing global landscape, the role of entrepreneurship in fostering economic development cannot be overstated. It is imperative for Kenya to embrace and empower youth entrepreneurs as a catalyst for driving innovation and creating job opportunities to spur and sustain the economy.

The traditional job-for-life career paths are insufficient which means mainstreaming of youth entrepreneurship into today’s changing labour markets and securing their economic independence is of paramount importance. Youth entrepreneurs will create jobs for their generation as well.

Thanks to the information superhighway, today’s youth are armed with an unparalleled access to information, technology, and networks. The youth appear impatient with the traditional way of life and are deliberately charting their own ‘new’ path to their destiny and that is where ideas of starting their business come in.

Youth ingenuity is much welcome since emerging technologies are opening up new job opportunities and inventing new ways to do conventional jobs in new ways. The youth are willing to try new things, take risks by investing their time, effort and money.

Studies have shown that a successful youth-led start-up can create new job opportunities for more youths and grow to new businesses which improve livelihoods by providing solutions to commercially viable problems.

The government through Women and Youth Enterprise development funds have done well to provide low interest funds for youth and women led start-ups. Funds and business training will go a long way to help unlock new businesses.

In the private sector, companies like asset financiers Watu Credit have introduced entrepreneurship models that allow the youth to access various products for use in income generating activities under a pay-as-you-go model. This enables more people to purchase, on credit, motorcycles, tuk tuks or cars for which can be used for self-employment.

Already, data from the National Transport and Safety Authority indicates that there are over one million registered boda bodas in Kenya, most of which are used for commercial purposes. This sector continues to support economic development and youth employment in our country, hence why it is important to make asset financing accessible to the youth.

Further, Watu is championing a cleaner and sustainable continent through the financing of new electric motorbikes. The Watu model allows customers to finance an electric motorcycle for as little as Ksh 450 daily, addressing the need for affordability.

The company has partnered with leading e-mobility manufacturers like Ampersand, ARC Ride, Roam, and E-BEBA to offer a wide range of choices that the youth can take advantage of.

Collaboration between the public and private sector to make financing and business ownership for the youth easier is crucial. This is one impactful way that the country can address the high rate of unemployment and its resulting challenges.

The writer is the  Kenya Country Manager at Watu Credit Limited

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