Continuing our series of articles from our Annual Report 2024/25, we outline here our work on our Youth Entrepreneurship Support Project (YESP).
YESP is a one-year follow on project to our Youth Economic Empowerment Project (YEEP) to ensure that specifically those young people which have completed entrepreneurship training can continue to access assistance from the project team to successfully start-up their businesses, which runs from July 2024 to June 2025.
To date, of those trained, 887 young people have set up businesses. Of that number, 711 have applied for loans from our microfinance partner, Goshen Finance, through our Loan Guarantee Fund facility of which 256 have been awarded funding, totalling RWF 70 million (c. £44,000).
The repayment rate currently stands at 92% which is testament to the thorough due diligence process that is undertaken in assessing business plans and applications for funding – as well as the continued support that the project team provides to the clients to ensure the success of their businesses and their ability to meet the repayments.
There are currently no defaults on any loans disbursed, but there are a small number of participants which have required extensions on repayment to enable them to have additional time to generate the revenue from their businesses to repay the loans.
The Loan Guarantee Fund is structured in such a way that once a loan is repaid, the capital is recycled to provide a new loan to another participant in the programme. Due to the nature of some businesses that are set up, the repayment date maybe some time after the award of the loan to provide sufficient time for the young entrepreneur to successfully set-up the business and for it to mature enough to generate the revenue to make the repayments.
In addition to the loans, a number of participants have used their group savings to fund their businesses. The participants are formed into savings groups during their initial training, and between them contribute money towards a group savings account which can be disbursed by mutual agreement to members of the group who are either awaiting a loan, or do not yet feel ready or confident enough to apply for a formal loan through Goshen.
As such, the additional grant will then be used to fund Community Business Development Assistants who work across the three project areas (Eastern and Southern Provinces of Rwanda, and Kigali) and the IGA Officer who coordinates their work and provides additional expert assistance. Funding for transport and communication (airtime) will also be used to ensure that this core team can undertake the outreach to visit the young entrepreneurs, as well as to maintain constant and open contact with them to check-in on their progress and to provide ad-hoc guidance as required.
With sustained support young entrepreneurs as their businesses develop can build up the credit record and the confidence to then be taken on as independent clients of our microfinance partners.
Success will be determined by the number of active businesses by the end of YESP and the sustention of the current high repayment rate. For the project participants, success will be assessed by the revenue that their businesses are generating, the income that they are earning from them, and the positive impact that this is delivering for their well-being as well as for their household and family members they support.
Longer-term as the project progresses, we will expect and track the number of businesses that are securing funding through independent channels, as well as the value of that capital. In addition to the livelihoods that the businesses will provide for the young entrepreneurs, we are already seeing from more mature businesses set up in the earlier phases of YEEP that additional employment is generated for other young people which amplifies the impact of the project.