Kampala. Access to finance is a major challenge hindering business growth among young entrepreneurs, a new report shows.
The report published by Anzisha youth entrepreneurship survey this month, shows that among the entrepreneurs surveyed, almost half—48 per cent— find access to finance difficult in their country.
The survey which provides snapshots of the realities facing young entrepreneurs in Africa is based on an emailed questionnaire answered by a selection of young entrepreneurs between the age of 15 to 25 across the continent.
The survey focused on five areas of operating a business- growth, sales and marketing, human resources, funding and support.
The report highlights that only 27 per cent of young entrepreneurs received any form of outside investment. About 59 per cent of respondents source their finances from family members while 52 per cent on grants.
Lincoln Kayanja, a 23-year-old youth entrepreneur says one of the challenges she faces is lack of enough funds to grow the businesses.
“The cost of finance is very expensive and with the depreciation of the Shilling, banks have also hiked their lending rates,” he says.”
Like Kayanja, several youthful entrepreneurs also reiterated finance as a major barrier.
Despite challenges faced, 84 of entrepreneurs reported employing others, underscoring the employment creation potential of youth businesses.
Mr Charles Ocici, the executive director Enterprise Uganda, while speaking to entrepreneurs at Stanbic Bank mentorship programme, said the challenge affecting the youth is lack of business focus.
“If you have your books in order, then it is easy to access cheaper credit options from banks,” he said.
Africa has the youngest population in the world, with an estimated 200 million people between the ages of 15 and 24.
But despite fast economic growth over the past decade, many youths still struggle to find productive employment.