CASE STUDY: YOUTHWORX MICRO ENTERPRISE LOAN PROGRAM 2005:

After receiving initial loan money the following process was undertaken:

     1.      Preparation
2.      Setup
3.      Follow-up

 PREPARATION

Preparation was necessary to help the Young Entrepreneurs (YE) to conceptualize their business idea and to understand the basic elements of running a business.

The young entrepreneurs were guided through to:

a)      Undertake research on the suitability of the location

b)      Where to source the equipment and materials necessary to start off the businesses

After the research, initial budget was drafted for each and every business proposed. This was pegged on the available funds; therefore the budget was very basic to help the entrepreneur to start.

Enhancing the bookkeeping skills.  YE were coached on simple bookkeeping and how to manage a business. It was emphasized the need of separating the personal money with the business money. In addition the YEs were shown how to attract and handle customers as a basis of increasing sales and ensuring repeated sale.

The loan agreement form was developed so that the YE can understand from the beginning that the money awarded is a business loan and will be required to pay back. (See attached)

SETUP

The following example businesses were set up:

A barbershop proposed and managed by George Otieno:

The business is situated at the Kenyatta National hospital residential area.  The loan was used for leasing of the business premise, furnishing of the business premise, buying equipments. This is a Barber Shop that targets to provide quality hire cuts to the residents of Kenyatta National Hospital. Requested for one-month grace period. His total Loan is Kshs. 12,370. 

Multipurpose barbershop by Felix Kigen:

This is located in Kericho about 200 kilometers away from Nairobi. He could not get a good location in Nairobi and therefore he opted to go upcountry to set up a modern barbershop.  The barbershop will be complemented with other accessories such as clothes and mobile airtime. This is to take the opportunity of the premise leased and to increase the revenue base.

ForeignAID Ratings surveyed the area it’s was the right set up as the location is adequate for the proposed business. The credit given was used for leasing of the business premise, furnishing and buying of equipment.

Brian donated the initial clothes. He requested for two month grace Period. His total loan Kshs. 11,000

Cereal shop by Wilson Kioko:

We have not finalized his set up as he had a problem with sourcing of the cereals at a reasonable price. Also his selling strategy was not clear.  He is undertaking more research and we will be meeting on Friday to review and set the date for the disbursement of the loan for the set up. He is setting up the business to be operated by his mother.

FOLLOW UP

Continuous follow-up on the business progress will be conducted on monthly basis to ensure the businesses strive and grow to employ more young people. If need be a training will be organized for the needy business to enhance their ability to run the businesses.

The program can work very well if preparation of both the YE and ForeignAID Ratings is properly undertaken. They have signed loan agreement forms that have been filed. The repayment is weekly. The YEs will be required to deposit money directly to a bank account. If you study the Loan Agreement Form, it will direct you how the operation will be done.

Please contact us for more information.