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Youth-led businesses: What are the factors for success?

1 de Mayo de 2020

The Metro Agri-food Living Lab model in Kenya aims to co-create knowledge and generate evidence on effective approaches to promote successful youth entrepreneurship among researchers, mentors, and entrepreneurs. The Living Lab model involves three components: experiential learning, mentorship and business support services, and access to finance. Set up by the Global Agribusiness Management and Entrepreneurship Centre at the United States International University-Africa (USIU), the project’s goal is to identify an effective combination of interventions to ensure that youth can operate successful, profitable, and sustainable agribusinesses.

The project builds on the results of its first phase, which worked with 60 young entrepreneurs from 28 counties. The second phase, which engages 1,200 entrepreneurs operating a wide range of businesses, seeks to answer two fundamental research questions: which approaches are successful to build youth-led businesses in the agriculture sector, and what is the added value of training, mentoring, and funding.

Emerging outcomes

Access to mentors and markets

Baseline data collected through a survey with participants revealed that 66% of 492 respondents have mentors in their lives, but only 41.1% relate to business mentorship. Men are more likely to access business mentorship (56.8%), with female respondents receiving mentorship in other areas. To address these gaps, the project links entrepreneurs with mentors working in a similar field to provide valuable insights and advice, particularly in terms of accessing markets and income.

Due to the geographical spread of the entrepreneurs, the project recruited locally based mentors to ensure close contact and relevant support. So far, 18 local mentors have been recruited and trained to support the entrepreneurs, each with more than two years of experience running an agribusiness. Locally based mentors are particularly beneficial for women because traveling for training is a barrier for 35.8% of them (due to household chores), and 46.3% of women stated they would prefer to attend training close to home.

Attracting finance

More than half (53.4%) of participants struggle to access financial services, and most use personal savings as their main source of start-up capital. Women are more likely than men to struggle with financial access because they lack collateral security (64.9%), business records (57.8%), and they have limited awareness of funding sources (57.3%).

To increase their chances of accessing funding, the training course designed modules on mobilizing resources and developing effective business pitches. The project team also identified potential funders to provide financial products, such as recurring working capital loans that target county governments and financing bodies. The project aims to link the entrepreneurs with financial sources and products that offer low fees and interest rates and that bear in mind the differences in accessibility for men and women.

Building local capacities

Training is decentralized to ensure accessibility and sustainability once the project ends. Fourteen county-based trainers have been recruited to deliver eight modules, including agribusiness value chains; marketing and accounting; applying information and communications technology in business; values and ethics; formalizing and registering businesses; sustainable business models; and, in partnership with county youth officers, developing agribusiness growth plans that will ensure support beyond the project. Building local capacity enhances continuous entrepreneurial support, and it is also anticipated to extend to other age groups to improve the business acumen of older generations as well.

Strengthening partnerships

An agreement was signed between USIU-Africa and the International Centre of Insect Physiology and Ecology to create a youth incubation program that will be established and managed with the university’s Global Agribusiness Management and Entrepreneurship Centre. A total of 2,500 youths across five counties working within the insect feed-based value chain will be selected for business incubation. The entrepreneurs will receive insect rearing screen houses and business development skills training from USIU-Africa, while the International Centre of Insect Physiology and Ecology will provide training in insect production and processing for animal feed.