This week marked a key milestone for young entrepreneurs in Kenya, 250 young people received a grant of KShs 3,6 million each with another 500 entrepreneurs receiving KShs 900,000 each to help them launch or expand their businesses. This is following a competition dubbed MbeleNaBiz which was implemented by the Micro and Small Enterprise Authority (MSEA) and the Ministry of Public Service, Youth and Gender Affairs with support from the World Bank.
The selection process was managed by the management consulting company, KPMG.
The competition had 11,000 young people from across Kenya applying, and after the recruitment process, 750 of them were selected to receive grants. Business plans presented were evaluated for high growth potential and capacity to create jobs for youths.
The two aspects of this award that I find exciting are that it is a grant and that entrepreneurs receive a lot of support to see them succeed.
A grant for Kenya's young people to build their businesses
In the past, most of the business empowerment plans that have been run or supported by the governments involved giving people loans, in partnership with banks.
The shortcoming of giving loans is that when those businesses fail, the entrepreneurs are left to service their loans, and where they are not able to pay, they get a negative credit rating. This affects them when they try to access funding in the future, effectively killing their entrepreneurial career.
Yet, such people are better placed to launch a new business as they have learned something through the failures. Instead of being encouraged and supported to try new ventures, they are punished for failing. This effectively kills entrepreneurship.
Giving these youthful entrepreneurs grants is a very welcome step.
Business support for Kenya's youth
The entrepreneurs who received the funding are also receiving something more than money. They will receive training, guidance on streamlining their business model, and access to resourceful people in the business.
This is meant to help them succeed.
This approach is necessary to ensure that these people succeed in business. The ultimate goal is to see them launch or scale, create employment opportunities and become profitable. Giving out cash would not be enough without this crucial support to these entrepreneurs, and it commendable that the program has focused on this.
There's room for improving MbeleNaBiz
While the whole exercise has received praise from different quarters, there is still more that can or could have been done.
Considering the huge population of young people in Kenya, it would be good to carry out such a program more regularly. This will help identify and equip more young entrepreneurs as early as possible. The number of grants could also be increased to cater to more people, considering that these small enterprises consist of the bulk of the economy.
The process also took quite a long time.
From the time people applied to when the grants were awarded, the whole process took 18 months. This is a long time in the life of an entrepreneur who has just launched. A survey by the Kenya National Bureau of Statistics showed that many micro, small, and medium-sized enterprises do not live past their second year. Making the process faster in the future will be helpful.
Besides the capital and skills, the usual culprits of corruption and unfavorable regulatory environment should also be addressed to see more entrepreneurs succeed.
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