To get out of poverty, Kenyan young entrepreneurs need an opportunity to see the bigger picture

Today marks Blog Action Day 2008 whose theme is poverty. At Yipe.org (the Youth Interactive Portal for Enterprise) we are fully aware of the challenges faced by youth-owned enterprises in Kenya to survive. Statistics from a 2007 UNDP study show that the earnings of non-agricultural household enterprises place them close to the official food consumption poverty line. The survey found that monthly earnings of such firms was Kshs. 2,370 – well below the national minimum wage.

New development thought and activity has shifted the focus of poverty reduction programs from aid to income/ wealth creation. Organisations such as KickStart have been in the forefront of this new approach in Kenya. These programs have assisted numerous young people to go into business and improve their livelihoods.

However, an often neglected barrier that keeps such entrepreneurs in poverty is that they do not see their businesses as being growth oriented. The perception is that either the enterprise is a hobby or just a means to put food on the table. This view been exacerbated by the structural barriers enterprising Kenyan entrepreneurs face such as an education system that does not nurture the entrepreneurial sprit, inaccessibility of useful startup and expansion capital, lack of business education and financial literacy, discriminatory perceptions of youth entrepreneurs and poor networks.

Young entrepreneurs need to be given the opportunity to see their businesses as having growth potential and thus come out of poverty. This challenge can be achieved by:

• improving the availability of credit to youth entrepreneurs (both existing and aspiring) by increasing their awareness of such financing opportunities;

• providing accessible business support services to assist entrepreneurs in finding capital, writing business plans, and complying with the various business registration and tax regulations, etc;

• initiating cost-friendly entrepreneurship educational programs to equip more youth with the skills to become entrepreneurs;

• advocating for market reforms that facilitate youth owned enterprise creation for example by reducing the costs of licenses required; and

• increasing entrepreneurial opportunities available to the youth by working towards eliminating discriminatory policies and stereotypes targeting youth entrepreneurs.

Development agencies working in poverty reduction, the government, financial institutions and other stakeholders can work on reducing the barriers to youth entrepreneurship. However, unless young entrepreneurs can see their businesses as being capable of growth and not just for subsistence, there will continue to be high proportions of enterprise death among them (over 70% of SME’s in Kenya do not survive their first year in business), and poverty will prevail.