Every year, the number of youth joining the labour market in Rwanda rises, presenting the government with a challenge —what with unemployment at 3.4 per cent while about 125,000 job seekers enter the market.

But there is hope as the country prepares to host a “Jua kali” exposition in Kigali, an event that will showcase some of the innovative minds in the sector.

The participants will share their experience and best practices to encourage more youth to join the sector, which in turn help reduce on the regional unemployment levels.

The youthful minds behind the small and micro enterprises (SMEs), or “Jua Kali” have interest in doing business but setting up one remains a major challenge even after the government invested in the development of skills.

“We realised that the only way to boost the SME sector and create employment for the youth is by providing them with life skills as soon as they graduate. This is why we have established incubation centres, to come up with start-ups.” Gasana said.

WDA provides skills development under the national employment programme and assists the youth to get access to finance and tool kits for their start-ups.

One of the women cooperatives that have benefited from such programmes is Ngororero Women Weavers’ Co-operative, which received at least Rwf12 million.

Francine Niyonsenga, the founder of the cooperative says they have managed to encourage, organise and train over 200 women and youth in weaving.

“With financing from the government, we have grown into a fully-fledged cooperative and our members are able to use their weaving skills to earn a living unlike in the past when they used to sit at home idle,” Niyonsenga says.

While there seems to be progress in the SME cooperative, Niyonsenga says that access to markets for the finished weaved products remains a challenge.

As a result, the cooperative is looking at how to improve their products so as to access regional markets and expand their individual incomes.

“We still struggle with getting markets locally and sometimes it takes longer to sell off the products. We are now planning for ways of expanding into regional markets and this will require more study tours and financing,” she says.

Even with the establishment of the Business Development Fund (BDF) — which provides at least 75 per cent credit guarantee for funding for SMEs locally, access to finance remains a big challenge for Jua Kali enterprises.

Niyonsenga says that getting a bank loan is an elaborate process that often affects their projected plans of development.

BDF business development manager John Kagarama agrees that SMEs still face a lengthy loan application process and overly bureaucratic procedures by financial institutions.

However, Kagarama says, BDF works closely with commercial banks, in order to provide the credit guarantee for SMEss but the requirements of getting business loans need to be followed as required, and failure to do so has seen some SME’s projects denied financing.

In order for SMEs to access financial support from commercial banks, which are profit oriented, they must come up with viable projects and fulfil the requirements of banks.

“To provide SMEs with a guarantee is not enough since they too have to play their part well,” he says.

From the experience of this environment, BDF says that the existing financial products cannot be adapted to service the poorest potential borrowers, and targeted groups have no profitable business opportunities because of their investment sizes, lack of managerial capacity and inefficient business models.

For BDF intervention to have a significant effect, Kagarama suggests that youth seeking to join the SME sector should adopt the association or cooperative model of bringing their efforts together.

“Financial institutions like commercial banks can easily trust a group of people in an association, than an individual when it comes to financing a project. Thus youth entrepreneurs who have good project ideas but cannot individually raise the 25 per cent of the project finance should form cooperatives so as to get funded,” Kagarama says.