Some innovative youth in Kiambu county are desperate for financial assistance to actualize their business dreams and aspirations.
Most of the jobless youth aspired to self-employ themselves to have a primary source of income or side job to sustain their livelihoods hence the need for financial institutions to offer them startup capital to realize their dreams.
However, this does not come easy as they experience hurdles, making the realization of these dreams slow and in most cases end up being unfulfilled.
Some of the challenges faced by the young people when setting up business include lack or insufficient capital, unpreparedness, lack of image branding, competition, access to the right workforce for hiring among others.
Unfortunately, youths who want to start up businesses cannot access funding from banks or microfinance as they do not give business loans to startups businesses.
Shelmith Kariuki, a business development officer at SMEP Microfinance Kiambu town and Moses Ndirangu, a senior relationship manager at Kingdom Bank in Kiambu say giving loans to start up business is a great risk amid the poor economic times.
She told KNA during an interview that banks are reluctant to entrust fresh entrepreneurs with loans for fear they may fail to repay unless they placed a collateral to back their application.
The duo contend that it is risky because the business person does not have experience in the field, they intend to venture into which might be trial and error.
Unfortunately, she says most of the youth do not have collaterals in form of a title deed, logbook or a payslip from a guarantor with regular income. Getting a guarantor is also difficult since not many people are willing to take the risk of standing in for them in case they were to be loaned by the banking institutions.
Lack of capital or insufficient capital is one of the major challenges faced by young people. One has a great business idea, a business plan, and a strategy but how to put those into action would require money which is not available.
Others have some money, but it is not enough to start their business, therefore require a little help to achieve their budget, yet they are unable to get that help. For others, it happens the other way round, where the little help is available but they cannot raise the amount to top up to the amount offered.
Irene, a supermarket attendant explains how she has a business idea but has no capital to actualize it. She says that she has enough experience with cyber work since she has worked in cyber for over two years. With that experience, she says it is a good business but starting it up would require an average of Sh100,000 which have been a challenge for her to raise. She further explains that her brother and sisters are willing to help her raise the amount, provided she raises a certain amount herself. Yet she cannot raise it as the salary she earns is not enough to help her live in Nairobi and manage to have savings.
Another challenge is finding the right people to hire. Discipline, experience, and commitment are some of the factors that are considered while hiring staff. However, most people who are looking for jobs do not meet these, and most of them show their good side but change after working for a while. Others lack experience so they only prepare for the basics of the field of the job for the sake of the interview, once they get the job, they cannot offer other services required.
Peter Mbugua, a 31-year-old cyber owner says he has had a hard time finding an assistant in his cyber. Every time he employs someone, they end up differing because they cannot serve customers well. Sometimes it is out of disrespect and for others it is indiscipline. “I take my job seriously and I like it handled with discipline and respect, but it is hard to get such people especially the young. One time I had to fire my assistant because he did not respect me since we both are like age mates.”
Lack of proper planning while setting up a business also is a challenge for the young. This includes not knowing the right market for their business which affects the area to locate their business as well as lacking image branding which would attract and retain customers.
Jams Mwenge, aka Mzae and who has been in business for over ten years advises young people on proper planning before they set up a business. He explains that some get huge amounts of money and immediately start business based on an idea they have had for a while without planning. He says that this is one reason as to why most businesses end up closing after operating for a while.
Unrealistic expectations is also an evident challenge among the young people starting up businesses. Most of the young people expect that their business should pick well and generate enough profits for them to achieve other goals like buying a piece of land, building a house, and even buying a car. In the event that business does not pick up as fast as expected, they get discouraged and lose interest in the progress of their business.
Poor or lack of managerial skills is also another challenge facing young people when it comes to business. Failing to keep a record of purchases, sales, credits, and stock-outs as well as stock available leads to loss of track of one’s business. It also leads to unplanned and unaccounted expenditure
Naomi Njeri who has been in the motor vehicle spare parts business since 20110 on her part says she has managed to stay this long because she keeps a record of all people who are indebted to her, that way she can follow up and ensure that she does not give away her products for free. Knowing what is out of stock and what is available helps her to avoid losing customers as well as overstocking products.
But most young people do not do this, as long as they have opened their business, to them what matters is that they go home with some money, they do not calculate profit or loss. Such businesses are likely to fail after some time.
Going for a short course on business management, conducting enough research on market, doing extensive background research about employees, being patient as well as developing a saving culture are some of the practices that could save the young people from living with unrealized dreams and losing their hard-earned money in businesses that are otherwise aimed at offering financial independence and stability.
The government through her stakeholders in the economy should therefore intervene to support prospective business people through contact tracing that would guarantee that they would pay up once they gain financial stability.
Lydia Shiloya and Lucy Mwikali