‘MbeleNaBiz’ Business Plan Competition and how it is creating economic openings for youth in Kenya  

Introduction

The Kenya Youth Employment and Opportunities Project (KYEOP), an initiative of the Government of Kenya, is a social protection and youth empowerment initiative being implemented over a five-year period (2016-2021). The project aims to increase employment and earning opportunities to targeted youth aged between18-29 years and who have up to Form Four level of education. It is funded by a World Bank Credit of $150 million (Ksh15 billion).

The project is implemented in 17 Counties: Mombasa, Kilifi, Nairobi, Nakuru, Kiambu, Nyandarua, Mandera, Turkana, Wajir, Bungoma, Kakamega, Kwale, Kisumu, Kisii, Machakos, Kitui and Migori. 

The KYEOP’s implementation design involves four government agencies, each coordinating a distinct youth empowerment intervention, arranged into components as follows:

Component 1 – Training and Workplace Experience – is being implemented jointly by the National Industrial Training Authority (NITA) and the Ministry of ICT, Innovation and Youth Affairs (MIIYA). It involves the training of the youth in technical skill areas under the supervision of NITA. In this activity, the youth apply for the training when the call for application is made, usually through advertisement in both electronic and print media.

The training in this category is offered through two pathways: Apprenticeship and Formal Classroom Training. The apprenticeship model is delivered by Master Craftsmen in a five-month practical training, while the classroom training is done through two months of classroom training and a further three months of internship in an industry setting.

The total number of youth planned to be empowered through Training and Internship (T&I) is 70,000. Out of this, about 43,000 have so far benefited from the programme.

Notably, 75 percent of those who have successfully completed the training have secured sustainable and gainful employment in various sectors of the economy. The service sector has turned out to be the best employer for this category of the youth.

Component 1 beneficiaries who undergo Job Specific Skills Training receive a monthly stipend of Ksh6,000 each to cater for transport, based on the attainment of at least 80 percent attendance. Besides, they are also legible to apply for grants under component two to start and grow enterprises around their skill area or any other area of interest.

Component 2 – Job Creation– is coordinated largely by Micro and Small Enterprises Authority (MSEA) with support from MIIYA. This component has two main products: Small Grants and the Business Plan Competition (BPC) dubbed “MbeleNaBiz”.

The small grants initiative targets 30,000 youth who are in small business or those who intend to start new businesses but lack capital. The maximum amount provided as grants is Ksh40,000. This money is given in two tranches and to the youth who would have been randomised after recruitment and has taken an Entrepreneurship Aptitude Test (EAT) to determine the business orientation of the applicants. The results inform the decision on the package of Business Development Service that the individual youth in this category may require after they have been selected to benefit in the grants category.

So far, 9,951 youth have benefited and have been given an accumulative amount of Ksh329 million. The next batch of the youth to benefit shall come from the youth who applied for the funds in cycle five and six.

Under BPC MbeleNaBiz, a total of 750 youth with plans or enterprises with high potential for job creation will be financed, where 250 beneficiaries will each receive a grant capital of Ksh3.6 million and another 500 beneficiaries awarded Ksh900,000 each. This makes a total of over Ksh1.3 billion. A further 1,500 youth have been trained on preparation of business plans.

The preparation leading to the award of the winners in this category is now complete and awardees have been notified. Through this initiative, a batch of young people shall be mentored into job creators and peer business counsellors.

Component 3 – Improving Labour Market Information – is being implemented by the Ministry of Labour and Social Protection (MLSP). The component provides labour market intelligence, including the skills required in the labour market, the documented skill gaps and employment opportunities. The information is used to inform the magnitude and depth of technical skill training under Component 1, and also to empower the youth with information of where the jobs are.

LMI is useful to both public and private actors in the labour market as a one-stop-shop for access to evidence-based information for decision making and policy formulation.

Component 4 – Strengthening Youth Policy Development and Project – enables efficient implementation of the initiative. The design of the programme created a provision for capacity building of youth officers on the Kenya Youth Development Policy and its implementation thereof.

To date, 111 youth officers serving in the department have undergone training in project planning and management and policy implementation. Important to note, Component 4 of the project has also facilitated the review of the Kenya Youth Development Policy 2019 and is currently planning to fund the dissemination of the policy.

The 'MbeleNaBiz' initiative

The Business Plan Competition (‘MbeleNaBiz’)is implemented under Component 2 of the project that is coordinated by MSEA together with a technical support team from the World Bank. Component 2 of the project supports job creation through the provision of start-up grants/seed capital and business development services.

The BPC financed innovative businesses – both start-ups and existing ones – across various sectors in all the 47 counties. Successful applicants get grants of either Ksh900,000 or Ksh3.6 million.

A total of 750 youth with business plans or who own enterprises have been selected for financing through ‘MbeleNaBiz’ at a total cost of Ksh1.3 billion, and a further 1,500 youth have been trained on preparation of business plans.

The winners for the different categories of the competition will be awarded by MIIYA after getting the results from KPMG through MSEA, who managed the competition.

‘MbeleNaBiz’ is intended to create new and expand existing youth-led enterprises by providing them with grant financing and/or business training. It also seeks to create jobs and increase income for young men and women.

By investing in young entrepreneurs whose ventures will be supported to generate employment opportunities and earnings for their fellow unemployed youth, the competition serves to contribute to the development of an inclusive economy that provides opportunities for as many young Kenyans as possible through the replica effect.

The Government of Kenya recognises the need for job creation to address the challenge of youth unemployment in Kenya, and the ‘MbeleNaBiz’ initiative was planned to contribute toward alleviating this challenge.

The ‘MbeleNaBiz’ targeted youth aged between18-35 years with aminimum of Form Four education, and who demonstrated intention to engage in entrepreneurial activity with the potential to create jobs and increase earnings for themselves and others in the country.

In the KYEOP array of products, BPC was the only one that targeted the youth with Form Four level of education and above.

Methodology of the ‘MbeleNaBiz’Business Plan Competition

KPMG Advisory Services, with the support of officers from MSEA conducted aNational Outreach Campaign in all the 47 counties. The campaign served the dual purpose of recruiting for the BPC while building a broader culture of entrepreneurship in Kenya, particularly in areas outside of Nairobi and other major urban areas. This sought to ensure access and inclusion throughout all the dimensions of the BPC in order to reflect Kenya’s diverse population and identify the highest-potential business ideas across sectors, industries, and communities.

To build networks for the youth enterprises which the project would fund, a total number of seven Memorandums of Understanding (MOUs) were signed with various partners to support various aspects of implementation of the BPC. The organisations that signed the MOUs are:

1. Kenya Private Sector Alliance
2. Kenya Methodist University
3. IHub
4. Young Women Christian Association
5. Youth Talent and Enterprise Development Centre
6. Business Networking International
7. Kenya National Chamber of Commerce and Industry.

To give the project the necessary thrust, a national launch was held on  July 10, 2019 at Villa Rosa Kempinsiki Hotel in Nairobi, attended by Government Cabinet Secretaries, high ranking World Bank officials and selected youth with good business acumen.

The BPC, through KPMG Advisory Services Ltd, made a ‘call for applications’ from the date of the launch for a period of 10 weeks that ended on September 2, 2019. A total of about 12,000 applications were submitted via an online portal and/or in physical form through County Youth Director offices. The applications are summarised below:

Summary of Paper Applications

Eligibility screening was then conducted and out of the 12,171 applications, 11,386 were found to be eligible. They met the eligibility criteria of Nationality, Education Level, Age, Place of Operation and Shareholding structure of at least 70 percent for youth. 

Upon further analysis, 4,951 applications proceeded to the next stage of submitting business plans, while 6,852 exited the competition. Out of those who submitted business plans, a total of 1,500 applicants benefitted from a training on how to prepare winning business plans.

A total of 3,804 out of the 4,951 submitted their business plans, which were subjected to three reviews by an Independent Judging Panel.

The third and final review was carried out on December 4, 2020 to pave the way for pitching of individual plans. This led to the final stages of short-listing the 750 winners who were identified to receive a grant of either Ksh900,000 (500 applicants) or Ksh3.6 million (250 applicants). The awards are planned to be given in three tranches, conditional on their utilisation as per the agreed protocols.

MbeleNaBiz and COVID-19 recovery strategy

The ‘MbeleNaBiz’ awards are coming at an opportune time to provide a relief to the youth businesses, which are most adversely affected by the negative effects of the COVID-19 pandemic, characterised by massive job losses and collapsed businesses.  

As contained in the Federation of Kenya Employers (FKE) report (September 2020), and corroborated by the Kenya National Bureau of Statistics (KNBS), it is estimated that Kenya lost 1.7 million jobs within the first three months after the country recorded its first COVID-19 case in March 2020. Similarly, the number of economically inactive Kenyans rose by one million to stand at 9,774,700.

The youth, and more so the unemployed, form part of these statistics.

These awards will therefore constitute the COVID-19 recovery plan targeting the youth. If utilised appropriately, these funds have the potential to revive economies, catalyse the recovery process and at the same time give hope to the youth.

The ‘MbeleNaBiz’ BPC awards will see the Government of Kenya pump in some Ksh1.3 billion back into the economy, which will obviously flare up and excite business recovery initiatives.

‘MbeleNaBiz’ now joins the other KYEOP family products of Training and Internship, Grants and Business Development Services and Innovation Challenge in empowering the youth to enable them make their meaningful contribution in building a better Kenya.