On October 29, 2020, the Rwanda’s Ministry of Youth and Culture (MYCULTURE), the United Nations Development Programme (UNDP), the Korea International Cooperation Agency (KOICA - a Republic of Korea aid agency) and other partners launched the Young Entrepreneurs Resilience Fund (the Fund) to support young Rwandan entrepreneurs whose businesses have been negatively affected by COVID-19 or who have developed an innovation in response to the pandemic.
The 500 million Rwandan Francs (Rwf) fund aims to help young entrepreneurs recover from COVID-19 and to play a role in its prevention. This intervention was initiated based on results from a rapid survey conducted by MYCULTURE to assess the effects of COVID-19 on youth-led businesses.
Around seven months after its inception, the fund had made a tremendous impact on youth-led SMEs across all business sectors.
Clarisse Kayitesi, 26, is among more than 157 young entrepreneurs who were supported by the Fund. She is the founder and CEO of a maize flour processing local company, SAGA BLESSING, located in Musanze district, Northern Province of Rwanda.
Before the outbreak of the virus early 2020, Kayitesi’s SAGA BLESSING had around 50 permanent employees. Due to the pandemic, “We were obliged to make 40 of our employees redundant as we had to suspend our production and operations due to COVID-19 restriction measures. This led to a significant deficit due to the loss of access to market,” explains Kayitesi.
Through a meticulous and transparent selection process, Kayitesi was lucky to receive a 5000 Rwf grant. The support helped her company to resume its operations abd rehire suspended employees after the Government of Rwanda eased the lockdown measures.
“When I look at the situation before and now, things have changed for better. We have reopened and rehired 40 workers, we are also re-conquering our markets. I am full of hope that the situation will even become better than today,” says Kayitesi.
The COVID-19 outbreak has emerged as the most significant adverse shock of that the global economy and lobal business services have experienced since World War II. Youth-led small- and medium-enterprises (SMEs) are among the hardest hit by the pandemic because they are more labor-intensive than other companies and therefore more exposed to disruption, especially when workforces are in quarantine.
Most youth-led SMEs have less cash on hand and limited financial alternatives, and mostly rely on support from local banks.
Kayitesi’s case is not isolated in Rwanda. A rapid nation-wide impact assessment conducted by MYCULTURE among 972 youth entrepreneurs to understand the scale of the impact of COVID-19 on their businesses indicated that 95% of the young entrepreneurs reported severe impacts on their businesses, ranging from reduced revenues linked to reduced demand, limited access to markets, and transport challenges, among others.
The survey showed that more than 40% of employed youth have been experiencing temporary suspended jobs, decreased salary (20%) or possible termination of contract (12%).
Permanent Secretary at the Ministry of Youth and Culture Emmanuel Bigenimana recognizes the gravity of the situation and the role played by development partners. “95% of our young entrepreneurs were heavily affected and expressed a need for financial support to overcome the challenges caused by the virus. We were able to work with our partners—the UNDP, KOICA and others to find solutions,” says Permanent Secretary Bigenimana.
Kayite has now regained hope that the future of SAGA BLESSINGS is promising. This ambitious young woman entrepreneur shares happiness with Ever Christine Uwamariya, the cofounder and CEO of Recycl’Africa, a local sustainable waste management company. It produces organic fertilizers, packing bags and pavers out of waste.
Uwamariya says she had no idea of how she was going to sustain her business amid several challenges brought by the pandemic.
The Young Entrepreneurs Resilience Fund came on right in time to save her from anxiety and desperation. “Had there not been this support, I would have not reopened my company. We were in total deficit and had nowhere to find funding,” explains Uwamariya. The 5000 Rwf that the company received helped to pay salary arrears, procure new equipment, and run marketing campaigns.
On the other hand, COVID-19 has presented opportunities for the youth to reinvent their business models and new products—and find innovative solutions to tackle the negative effects of the pandemic.
A group of four young people led by Usanase Abdou developed a mobile application “AGRITrials” to help connect farmers who use Android phones with markets, experts, and fellows farmers, and to provide them with access to accurate information about modern agriculture.
“During the lockdown period, farmers faced many challenges because physical contacts were restricted. We came up with an idea of developing a mobile application, ‘AGRITrials’ that can help them from where they are,” elaborates Usanase. He adds that “the application provides them with accurate information about markets and can connect them to their peers or experts. After downloading this application, anyone can ask any questions and get answer as quickly as possible. We are very satisfied because this was our ambition.”
Since its launch in August 2020, the application has registered more than 400 users. The funding that Usanase and his colleagues received will help to improve the appiclation’s functionality, market it, and make it available for the users of other smart phones such as iPhone. A website specific to the application will be developed to attract more users.
Supporting Africa’s youth is not a luxury. It is imperative. Africa’s young entrepreneurs play a driving role in creating job opportunities. The Deputy Resident Representative of UNDP in Rwanda, Ms. Varsha Redkar-Palepu commented on the effective partnership between UNDP, KOICA and MYCULTURE that reignited hope among young Rwandan entrepreneurs.
“At UNDP, we are pleased that together we were able to help these young entrepreneurs to sustain their business despite the hardships of the pandemic. This is the kind of partnership that should be promoted everywhere to help young people to recover from adverse effects of COVID-19 and build back better,” Varsha says.
The Deputy Head of Mission of the Republic of Korea to Rwanda, Mr. Jangyun Choi, expresses reiterates his country’s commitment to continue working with UNDP to support social and economic development of youth in Rwanda.
“I am pleased to notice that Korea’s support is contributing to the resilience of youth in Rwanda, especially young women who are in business sector,” says Mr. Choi. “This project is symbolic to us because Rwanda is a priority partner of the government of Korea and UNDP is our priority partner in cooperation projects. Support that strengthen bring resilience of young people is very important and we look forward to further results of this project.”
Young Entrepreneurs Resilience Fund is part of a flagship project “Youth Connekt” that is supported by KOICA through UNDP. It is a platform aimed at empowering youth by enabling them to connect with each other and with policy makers, with an objective of creating socio-economic opportunities.
According to International Labour Organisation’s report 2020 on the impacts of COVID-19 on jobs, education and mental well-being, the impacts of COVID-19 on people, jobs and businesses are likely to be long term and hit hard on the most vulnerable populations, including youth. Even before the COVID-19, the social and economic integration of youth was an ongoing challenge across the globe. Unless urgent action is taken, young people like Kayitesi and Usanase are likely to suffer severe and long-lasting impacts of the pandemic.