After the failure of the Youth Venture Fund, President Museveni on Sunday 26th January 2013 launched yet another youth fund, the Shillings 265 billion Youth Livelihoods Programme.
Pius Bigirimana, the Permanent Secretary in the Ministry of Gender, Labour and Social Development, who is also said to be the brain child of this fund, has told local media that they picked lessons from the failed Youth Venture Fund, but insisted there will be no cash handouts.
Bigirimana added that 70 percent of the funds will go to purchasing assets for the youth who will be involved in entrepreneurial activities. Bigirimana explains that this money would come in handy to offer the youth with equipment suitable for them to start their own businesses.
The Youth Venture Capital Fund was different. The government provided the funds – about 25 billion shillings every financial year, which would be disseminated through commercial banks. Stanbic Bank, Centenary Bank and DFCU were the banks in charge of disbursing the funds. This was part of various government interventions to reign in on the unemployment, especially among the youth.
Bigirimana notes that one of the failures of the Youth Venture Capital Fund was that it excluded “the wider community” and that the Youth Livelihood Program allows the youth at the bottom of the pyramid to also have access. Furthermore the other criticism of the Youth Venture Capital Fund was that commercial banks required collateral, which many youth didn’t have. In fact, the youth are still considered risky to lend money to – by commercial banks – because they rarely have collateral.
The banks, according to the youth that complained, had stringent measures making it hard for them to access the money. As a result of the apathy and sometimes failure to disburse the funds, banks like Stanbic Bank stopped giving out the money. Fred Mugisha Bantu, the Head of Corporate Affairs, Stanbic Bank in an email response to URN said they stopped the disbursements in 2013.
At Centenary Bank, Elisha Lugoloobi, the Loan Officer says that they disbursed Shillings 27.4 billion to about 7,630 youth. He was quick to point out there were however no success stories to tell.
Among the challenges faced, Lugoloobi said many Youth have no evidence of their age, do not have businesses yet one to qualify must have an active business and that many of them have failed to get two reputable people to guarantee them.
Whether the new initiative will be successful, only time will tell as it would have to survive a stress test of misappropriation, like some programs like NAADS. Bigirimana believes this program is different and that it won’t be like NAADS.