Over two-thirds of sub-Saharan Africans are under 25. This is also the same group that experiences chronic underemployment. A lot, perhaps too much emphasis has been placed on the economic promise this brings. Youth are expected to shape, participate in and lead innovative, robust and inclusive economies – with entrepreneurs at the vanguard.
Perhaps the more sobering realities around this hope go unmentioned- whilst there has been a steady rise in entrepreneurial activity over the past decade- youth entrepreneurs remain largely unsupported and unbankable. The entrepreneurial support ecosystem needs to take a few basic actions to bolster the support they offer to young entrepreneurs. We suggest three fundamental actions for maximum impact:
- Ease Constraints on access to capital particularly for young entrepreneurs
The tension between making a profit for lenders (e.g. commercial banks) and the lack of collateral for young entrepreneurs means that young entrepreneurs, more than most, suffer some of the harshest constraints on capital. A significant number of young entrepreneurs often come from very poor families who are unable to offer collateral on their behalf or offer them startup capital. Added to being unemployed and not being able to raise some capital that way, bootstrapping also seems like a foreign concept.
At the same time, there has been a steady rise in innovative youth focused financing mechanisms for other endeavors – more especially for further studies. Here’s a thought – why only offer loans to young people going to university? – Why not offer similar financing to young people who want to start businesses? It was in answer to this question, that for instance, Richard Branson launched Virgin Startup which offers financing and the support young entrepreneurs would need to ensure returns on that initial investment.
- Support more entrepreneurs, earlier.
There is growing evidence to suggest that non-financial support is just as, if not more important than capital in determining the success of youth businesses. In our engagement with the support ecosystem, it becomes apparent that a lot of the entrepreneurs supported tend to have been previously offered some kind of support through an incubator or accelerator program. Whilst this could mean added benefits for the individual entrepreneur, there are potentially a lot more nascent youth entrepreneurs that could need support at varying levels. Supporting youth businesses does not necessarily have to be through structured programs and require a lot of financial investment. Individual entrepreneurs, advisors and other professionals can achieve a lot of impact by offering mentorship to a young entrepreneur or two.
- Think differently about education and training
There are 200 Million young people in Africa – assuming that all these young people will go on to pursue higher education, it is reasonable to doubt that the less than a thousand universities on the continent can accommodate all youth. It becomes clear that we need more scalable and affordable, and accessible education options for young entrepreneurs.
There are a few programs across the continent that stand out. One example, We Think Code in South Africa – teaches coding for free to young people from across the continent. The Meltwater Entrepreneurial School of Technology based in Ghana- incorporates skills based training, incubation and support through a structured program for young African entrepreneurs. These initiatives and others continue to demonstrate that whilst there is space for conventional education and training, scaling support will mean a much more integrated & context-focused approach.
These three actions, coupled with stronger dialogue and coordination within the support ecosystem can only take us a step further in realizing the African entrepreneurial dream. To learn more about how you can partner with the Anzisha Prize email firstname.lastname@example.org