Youth venture Capital Fund is rolling out well

James Abola wrote in the Daily Monitor of Tuesday April 3, under the headline, ‘Rethink the youth venture capital fund or forget it.’ In that article, Abola states, “ What might have been intended as a fresh effort on the part of the Uganda government to address the challenge of youth unemployment is now beginning to look like a bad comedy when almost 10 months after the budget, the fund is still marred in procedural matters and even a single cent is yet to be disbursed.”

If Mr. Abola had no intention of misguiding his readers; he should have discovered through a simple inquiry that returns as at March, indicate that at least over a billion shillings have so far been processed and or disbursed by the three partner banks namely Stanbic, DFCU and Centenary for the benefit of successful youth applicants.

Another Shs1.5 billion is at various stages of processing for received and compliant applications. Over 1000 youths are the tracked inquiries so far and potentially, these may interpret into potential viable applicants. Elsewhere, the article which heavily deploys a tactic that politicises a matter that should have been treated otherwise by a writer who claims authority in the subject; raised three issues which allegedly are the reason the fund has not taken off. Count one as he stated it does not deserve a comment.

Count two according to the author: “the fund was announced before the mechanism for managing it had been fully worked out.” Indeed it is not uncommon for government to make a policy pronouncement and allow its agencies to develop relevant operational frameworks. For example, the policy pronouncement on the youth venture capital fund was both an executive and political commitment. The Ministry of Finance, as the relevant entity operationalised it and brought on board other core/ strategic partners. Indeed, as we speak not only is it fast forward flight mode but these other private sector partners have re-energised the fund with new money.

Accessing the Fund
It is important to note that just like any other initiatives that are political as well as monetary; the fund also attracted a fair share of stakeholders all driven by varying interests. From politicians who had promised the youth free money to the youth themselves who were anxious to cash in without much thinking about the kind of projects they needed to undertake.

To a large extent, these interests affected the communication and delivery of the fund to its intended clients at inception stage. This has since been rectified and consistent information is now readily available from the Ministry of Finance resources as well as the sites of partner banks as named above. Information can also be got from the participating banks’ branches countrywide.In his count three, the writer claimed that Shs5 million and Shs25 millions, to be lent to individuals and cooperatives respectively, is only good for a brief case business or “to buy food for the proprietor.”

The foregone exposes the writer as someone either detached from reality or has not closely followed the numerous success stories of farmers and other entrepreneurs that Daily Monitor and The New Vision prominently feature. If Mr. Abola’s kind of borrower is a youth, or indeed any other person, who has capacity to spend Shs25million on meals (proprietor’s food as he put it) then this is NOT the kind of person for whom the fund is meant.

Surprisingly, the writer acknowledges the fact that 80 per cent of startup businesses in Uganda collapse in the first two years and that to thrive they must be founded on basic principles such as good business concept; hard work and competitiveness. He also cites other countries which have implemented similar schemes but “make venture capital funds to be highly competitive.” He however disappoints, when under the same write-up he comes across as denouncing the set eligibility criteria which require the youth to present two guarantors and be willing to receive advice and participate in financial skills training and mentoring for proper business management.

What shapes the Fund?
This is to invite the writer to appreciate government’s efforts to make funds available to the deserving ones through a structured approach. This is a venture fund, it is not handouts. It is a fresh and deliberate sustainable approach away from the traditional implementation of Entandiikwa, Boonabaggagawale and other related schemes which served their purposes then.

This youth fund is shaped and informed by unique challenges which required a unique and sustainable solution. That government is willing to take the leap of faith and mobilise resources; work with the youths that are trainable and bring to fruition the many good business ideas they possess is commendable. Going forward and to better the operating framework of the venture capital fund is a virtue Government has already demonstrated. To plug it and declare it “a still birth” as proposed by the writer is unwarranted and defeatist.
The writer works with the Ministry of Finance.