Gambia: Financing entrepreneurship and job creation in The Gambia


For countries struggling with high rates of unemployment and underemployment, entrepreneurship offers a potential avenue for creating more and better jobs, especially for young people.

This is the case in The Gambia, where the lack of employment opportunities for young people has been an important factor in encouraging high rates of irregular emigration to destinations elsewhere in Africa and Europe.

But entrepreneurs in this West African country face a serious obstacle to starting and growing businesses: a chronic lack of funding.

Private sector credit in The Gambia is equivalent to only 15% of gross domestic product (GDP), well below the West African average of 59%.

Access to finance is particularly difficult for young entrepreneurs, who report that high interest rates and collateral requirements well in excess of the loan value hamper their ability to start new businesses and increase business-creating investments. jobs.

Micro, Small and Medium Enterprises (MSMEs), which account for the bulk of employment in The Gambia as elsewhere, find it more difficult than their larger competitors to secure financing.

As part of the Youth Empowerment Project, a broader initiative to promote skills development and the creation of decent work opportunities for young people in The Gambia, ITC has established three related programs to support entrepreneurs and businesses to access start-up and working capital.

The first is a mini-grant program targeting local entrepreneurs, with the aim of enabling them to purchase equipment, materials, permits and other inputs essential to the business.

Applicants submit plans outlining their business ideas and receive the equivalent of up to $ 1,000 as well as training in financial planning and practice.

To manage the mini-grants, ITC has partnered with the Gambia National Association of Credit Unions (NACCUG), a local financial institution. Successful applicants submit invoices for their planned purchases to NACCUG, which procures the items directly from suppliers and provides them to beneficiaries.

For young Gambian entrepreneurs and MSMEs currently unable to access bank credit, a mini-loan program offers credit products at reduced interest rates and with modest collateral, with ITC providing partial loan guarantees.

The loans, which are expected to reach an average value of $ 3,000 with a cap of $ 10,000, are intended to finance equipment and working capital for up to 580 existing entrepreneurs and small businesses.

Finally, for high growth companies, ITC sets up a network of angel investors. It would provide young Gambian entrepreneurs with access to both capital and mentorship. Meanwhile, for potential investors, it would serve as a transparent and impartial channel to assess potential deals in the country.

The funding programs serve to complement the work of the Youth Empowerment Project to create a more supportive ecosystem in The Gambia for new and growing businesses by using targeted public support to leverage private investments in vocational training and value addition in the sector. agriculture, manufacturing and services.

“Tekki fii! – Wolof for ‘make it here’ – is one of the slogans associated with the project: more opportunities for decent work at home would show young Gambians that they have alternatives to the ‘backway’, the local term for the perilous journey by land through neighboring African countries and across the Mediterranean Sea to reach Europe.

By the end of 2018, a panel of representatives from the Youth Empowerment Project, NACCUG, the Gambian government and three associations of young entrepreneurs had approved 97 mini-grants – just under one in four applications – worth € ‘approximately $ 85,000.

The beneficiaries, including 36 women, used the funds to open or develop businesses in sectors ranging from poultry and agriculture to catering and clothing. They report higher incomes, usually more than expected, as more successful companies have already hired new workers.

The mini-loan program disbursed nearly $ 35,000, allowing eight businesses in industries such as fashion, poultry and restaurants to expand.

The funds come directly from the partner financial institution, the Social Development Fund, a nonprofit development finance institution overseen by the Gambian central bank, which was selected to manage the program after an appeal process. offers.

It offered the best deals in terms of low warranty requirements – allowing equipment purchased to serve as its own warranty – and annual interest rates of up to 10% compared to market rates of around 18%. .

The mini-grant program originally targeted 250 beneficiaries by 2021, although given the high demand, that number – and the associated financial resources – could be increased.

The mini-loan program is expected to intensify in 2019, accompanied by awareness raising to explain the mechanism to potential borrowers.

ITC will support NACCUG and the Social Development Fund to bridge the two programs to help successful mini-grant recipients access credit to grow their businesses.

Partnerships and staffing preparations are underway to launch the Gambia Angel Investors Network in coordination with the regional ecosystem for angel investing, including through a partnership with the African Business Angels Network.

Bubacarr Jaiteh

After his attempt to make his way to Europe ended with his imprisonment for ransom in Libya, Bubacarr returned to The Gambia in August 2017. He bought 75 chicks, intending to sell meat and eggs to the inhabitants of his village near the capital, Banjul.

With the mini-grant he received in April 2018, Bubacarr bought more chickens as well as food and feeding equipment.

His company, Sonaba Poultry, is now officially registered, with two full-time employees and over 1,000 chickens. Sales to local mini and supermarkets boosted his profits to $ 1,300 within six months of receiving the mini-grant, nearly double what he had expected.

Isatou Jobé

After working in restaurants in the Gambian tourism industry, Isatou used a mini-grant to open a restaurant in her hometown of Farafenni, in the country’s north shore region.

Her restaurant, where the 21-year-old prepares breakfast, lunch and dinner, now employs three women.

Mam S. Danso

Obtaining a mini-grant enabled the 32-year-old to purchase sewing machines and office equipment to start a clothing design business in her hometown of Jarumeh Koto, in the Sami district. from the Central River North area.

The high demand on religious holidays generated profits of $ 400, even after paying her salary to herself and two employees.

She does not miss her old jobs in Banjul and now aspires to become one of the greatest entrepreneurs in her region.

Isatou says the training she received alongside the grant helped her manage the company’s finances more effectively.

Source-Gambia Youth News

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