Serious engagement with youths on business loans
By Joseph Kayira
For millions of Malawian youths, the going has not been easy in so many ways. Those who thought that after graduating, they would easily land jobs of their dreams, they have less palatable words for the political leadership. A mere mention of the previous Tonse Alliance administration’s promise of one million jobs provokes a feisty reaction – with youths growing worried – alleging politicians don’t care an inch about the welfare of the young generation.
You cannot entirely blame the youth for feeling this way about the country’s political leadership. Politicians tend to be active and engaging only when they are campaigning for office. It happens to be the only time youths are mentions on their busy schedules and itineraries. Youths are promised access to loans, they are assured of financial inclusion but once these politicians cross the bridge, there is little mention of how they would implement their campaign promises.
Yes, loans are necessary for Malawian youths primarily to enable them to overcome a significant lack of access to capital, which is a major barrier to pursuing education and launching businesses. By providing essential financial resources, loans help young people build sustainable livelihoods, manage financial pre-assures, and contribute to broader economic growth and development across the continent.
Economic empowerment for the youth is the way to go (Photo Credit: Internet)
“The indifference we see every time a new government is in place is worrisome. As youths, it appears we only matter when it is time to vote. And once we vote them into power, the president, the Members of Parliament and Councillors, the marriage between us and them ends there,” says one youth who wanted only to be identified as Charles.
He acknowledges that government cannot employ every graduate from the many universities and vocational and technical colleges sprouting up across Malawi due financial challenges. However, Charles says government has institutions such as National Economic Empowerment Fund (NEEF) and other financial lending institutions that can play a significant role to have access to start up and expansion capital as this is the biggest challenge young entrepreneurs are facing.
“Loans provide the initial investment we all need to successfully turn business ideas into fruition. Without a serious capital injection how do you expect the youth to make it in business? Loans are critical in purchasing of equipment, managing daily cash flow, and in the long run growing of the business itself. Actually, loans help us to build assets, a key component in business,” Charles says.
Loans are necessary for Malawian youths primarily because they provide essential funding education, stimulating entrepreneurship, job creation, improving livelihoods and welfare, financial inclusion and skills development, and economic development.
In essence, loans serve as a critical bridge, providing young Malawians with the resources and opportunities needed to overcome financial barriers, become productive members of society, and contribute meaningfully to the country’s economic growth.
Simon Carter, Regional Director of Sub-Saharan Africa International Development Research Centre points out in a paper ‘Africa’s Young Entrepreneurs: Unlocking the Potential for a Brighter Future’ that the formal sector is unable to meet the employment demands of the growing young population. For millions of young Africans, creating their own enterprises is the only avenue open to them for employment.
Youths’ access to forex is essential for their businesses (Photo Credit: Internet)
He says in tacit acknowledgement of this phenomenon, governments have adopted a wide range of policies and programmes aimed at facilitating entrepreneurship. However, such interventions must be informed by a solid understanding, based on reliable data that accurately describe young people’s aspirations, their challenges, and how they can overcome the obstacles inherent in establishing and running a viable enterprise.
“Before research by the Global Entrepreneurship Monitor (GEM), much of the evidence of young people in the private sector was anecdotal and exclusively country-based. The evidence in this report demonstrates that young people are constrained by insufficient education and training for a business career, a lack of infrastructure and difficult access to finance.
“These factors not only constrain the efforts of young entrepreneurs; they also hold back the pace of economic and social development more generally. What this report shows is that the dynamism of young people can be unlocked by providing relatively simple but comprehensive policy responses directly targeted at them,” Carter says.
There are nearly 200 million Africans aged between 15 and 24. This makes Africa the youngest continent on the globe. The potential contribution of its young people to the continent’s sustained economic development is immense. By 2040, Africa’s young workforce will be the largest in the world, surpassing that of both China and India. Harnessing the potential of Africa’s youth is, thus, imperative.
Youth enterprises in Malawi and across Africa struggle due to limited access to capital, poor infrastructure, a lack of business and financial skills, and bureaucratic hurdles. These factors, combined with challenges like founder burnout and difficulties scaling too quickly, create a difficult environment for young entrepreneurs to thrive. Greater and serious engagement with the youth can therefore help them to access loans and positively contribute to national development and bail them out of the vicious cycle of poverty.
