Why youth enterprises fail to survive

By Jackson Okoth

Nairobi, Kenya: Most often, youth think they can build their business overnight. But it requires patience, perseverance and getting to know the market that you are in.

“If you persist and look for opportunities within that market sector in the long run, you will succeed,” said Dr Nyambura Koigi-Managing Director, Postbank Kenya Limited.

She made these remarks this week on the My Chat with a Bank CEO, a weekly online session organised by Kenya Bankers Association.

The topic of discussion this week was Youth Entrepreneurship through Savings and Investments.

“My view is that youth are in too much of a hurry...in every enterprise the most important thing is to start small and build it over time and to have a plan that guides you in how you develop your business,” said Koigi.

Kenya’s Vision 2030 blueprint targets to increase the savings to gross domestic product ratio from 17 per cent to 30 per cent. It is for this reason that all, including the youth are encouraged to save.

Higher deposits

While the Government has created the Uwezo fund to assist the youth participate in public tenders, uptake is still slow. This is because the fund appears mainly focused on groups funding.

Interest rates charged by banks on loans are also expensive and beyond the reach of many youth enterprises.

Interest rates vary from time to time, depending on developments in the market and also on the amount saved.

“Most banks will negotiate the deposit rate depending on the amount and the term of the deposit, for example longer term deposits and higher deposits, attract higher interest rates...we have seen deposits in this market being as high as 10 per cent depending on these variables,” said Koigi.