Digital business training: a GAME-changer for young agripreneurs
The Cultivate Africa’s Future Fund (CultiAF) is a ten-year, CA$35 million partnership (AUD$37 million) between IDRC and the Australian Centre for International Agricultural Research (ACIAR). CultiAF funds applied research aimed at improving food security, resilience, and gender equality across Eastern and Southern Africa.
In Kenya, young people aged 18 to 34 years account for 29% of the population and play an important part in the country’s economic growth and transformation agenda. However, 70-80% of youth-established businesses fail within the first two years. To support entrepreneurs to create sustainable and profitable enterprises, the United States International University-Africa (USIU-Africa) hosts a business training and mentorship program that also links young people to financial institutions for loans to grow or enhance their businesses.
Now in its second phase, the project was set up by the Global Agribusiness Management and Entrepreneurship (GAME) centre at USIU-Africa. It is supported by the Cultivate Africa’s Future Fund (CultiAF), a 10-year partnership between IDRC and the Australian Centre for International Agricultural Research. The project aims to understand what combination of interventions works to ensure youth-led business success in the agriculture sector. Scaling out the approach of business training combined with mentorship and financing, this phase has attracted 1,200 applicants – up from 60 in the first phase – and has worked directly with 492 youths operating a wide range of agribusinesses.
Digital training toolbox
When COVID-19 first hit, the project rapidly adjusted its outreach approach, moving to online webinars and meetings using Zoom and Teams platforms, for example, instead of via face-to-face interactions. County-based WhatsApp groups were also established for easier communication between the youth and their mentors. The project went further to secure affordable internet bundles for participants by partnering with internet service providers, namely, Safaricom PLC and Telkom Kenya. With access to subsidized data, the entrepreneurs were able to venture into online product marketing using social-media platforms, and the project was able to continue delivering peer-to-peer learning and business mentorship.
Building business resilience
The project is working with a diverse range of agricultural enterprises, including in poultry, vegetables, dairy, potatoes, fish, wheatgrass, rabbit farming and silkworm. The course’s nine training modules, which include value addition, online marketing, and financial record keeping, have enhanced the confidence and skills of the agripreneurs, enabling many to further diversify and/or expand operations.
“We were taught not to be rigid, to find other ventures to maximize profit,” said 32-year-old entrepreneur Philip Ndwiga, who farms wheatgrass in Kiambu County. Applying lessons learnt from the training, Ndwiga has branched out into making juices and powders from his crop. These value-added products can be mixed into drinks or porridge to increase their nutritional value and provide him with a good income: “From 1 kg of wheat seed at CA$0.70, I can get CA$4.67 in profit after deducting the operational costs,” he explained.
As well as increasing the incomes of agripreneurs, diversification was found to be a key factor in enabling businesses to stay afloat during COVID-19. A study by USIU-Africa on the factors that enhance agripreneur resilience collected data from 500 youth across 31 counties. The study found that the time the entrepreneurs spent networking, seeking business advice and additional funds, and using social media to increase sales were also important factors for those businesses that have made it through the pandemic.
Based on lessons learnt from phase one, the project implemented various gender-sensitive approaches to engage and enhance women’s retention on the business training and mentorship program. For instance, the project recruited and trained locally based business mentors to help overcome the challenge faced by 35.8% of female participants of juggling training with household chores. “They helped us a lot; they gave us transport for attending the training,” said 29-year-old entrepreneur Jackline Mutiso who grows lettuce using hydroponics in Kiambu County. Mutiso, along with the other women participants, claimed she would have dropped out without the supportive mechanisms in place, but as a result of the trainings, was able to build her capacities in financial record keeping, business management, and purchasing. “We didn’t have much knowledge, but they taught us how to run the business more effectively,” she added.
Other gender-sensitive support strategies targeted young mothers. For example, the provision of childminders at the training centres, as well as feeding and changing facilities, were provided for use by the course participants and training staff alike.
Scaling up support
With 53.4% of the participants struggling to access financial services due to lack of collateral, most use personal savings as their main source of start-up capital. Women are even more likely than men to struggle with financial access due to their lack of collateral security (64.9%), business records (57.8%), and limited awareness of sources of funding (57.3%). To increase their chances of accessing finance, the training course has identified potential funders to provide financial products, such as recurring working capital loans. The agripreneurs have been linked with county governments and financing bodies such as the Agricultural Finance Corporation, Juhudi Kilimo, and Kenya Women Microfinance Bank. However, complications arose as a result of the pandemic, and the funding groups have chosen to postpone their backing for the meantime.
The GAME centre is supporting county governments to implement county-specific agribusiness strategies via the upscaling of training interventions, and by working with private-sector players to accelerate the implementation of funding opportunities for youth. In Nyandarua County, for example, under the guidance of the GAME centre, the government sponsored an agricultural field visit for 33 young entrepreneurs (15 women and 18 men) to interact and learn from successful local agripreneurs. The same government has also partnered with Equity Bank to offer funding for up to 10,000 promising young entrepreneurs to develop their businesses – including for the USIU-Africa GAME centre alumni.
The research by GAME indicates that business training and mentorship increases the performance and profitability of youth-led businesses. Digital applications have been key to enabling participants to access the advice and support needed to modify their businesses during COVID-19 and have helped the project to continue to deliver its training and mentorship components.
Based on the research outcomes that indicate gender-sensitive strategies increase female retention within the training program, the GAME centre intends to learn from and adapt these approaches to provide further training support to disadvantaged groups. For instance, the centre is actively engaging with the Government of Kenya’s Uwezo Fund, which promotes businesses and enterprises run by women, youth, and physically disabled people, to offer them training and mentorship prior to providing them with business financing. For the future, the project intends to scale out further by including an even greater diversity of value chains and to extend its reach into other countries in sub-Saharan Africa.
- Monthly sales of young entrepreneurs have increased by more than 10,600 Kenyan shillings (approximately CA$120), thanks to the agribusiness training and mentorship program.
- Since October 2018, over 490 new jobs have been created at the youth-led enterprises as a result of the additional income.
- 67% of the businesses launched in the program’s first phase were women-owned and, in the second phase, most participants (53%) are women.
- Valuation of the youths’ enterprises has increased by 22%, and business registration has increased by 25.7%.