A program in Rwanda is helping youths who have undergone vocational training to earn a living from their skills by funding start-ups for them. With loans of up to Rwf 500,000, the Business Development Fund (BDF), through its program Toolkit has improved the lives of more than 11,586 Rwandan youths.
Started in 2014, Nyirumuringa Elie, Head of leasing in BDF, says the program targets young people between the ages of 18 and 35 years, who have learned a variety of professions including carpentry, construction, sewing, car drying, electrical work, cooking, hairdressing, and petting, who want to get support.
Elie said: “At the beginning of this program, there was a problem with young people who have been educated but don’t have jobs, so our government set up a special program for these young people who have been educated in the field, from unemployment to entrepreneurship, where we require a vocational student, to be in the youth category. Before the law was changed it was from eighteen to thirty-five, now it is up to thirty and not exceeding seven years after graduation.”
The BDF usually informs people about this program through many channels like on the radio, on the BDF website, and through marketing mobilization through local government among others. From, an interested candidate visits any BDF office located in every district in the country. He or she deposes their project plan, clearly explaining what they or wants. This project plan will be accompanied by an invoice form to show the cost.
After getting many projects from the youth, a committee of seven members sits down and makes a technical analysis of all candidates and their projects then they choose the ones who met the selection threshold.
The selected candidates are accompanied by the person in charge of the BDF program to buy all the materials they asked for in their project plans. The value of the materials needed does not exceed Rwf 500,000. Additionally, the receivers of the funding and the BDF enter into a contract agreement.
According to Elie, they give three months grace period to the one who received the fund before he or she begins to pay the loan and they are required to pay the loan in 24 months.
Elie said: ” The BDF gives them the materials which have a value of Rwf 500,000. Then they will pay half of that price as a loan which means they pay two hundred thousand Rwandan francs, with no interest and no collateral, and the other half is given as a grant from BDF.”
When the receivers begin to pay the loan, some members of BDF in charge of this program make follow up with them to find out how the business is progressing and if they are facing any challenges in their businesses. In case of any challenges, Ellie said that they give them ideas on how they can navigate around them.
Nyirahabimana Marie Josée has four children, living in Kamusenyi cell, Byimana Sector in Ruhango District, Southern Province. She is one of the recipients of this BDF funding. Josée is very grateful for the support which she says brought her out of poverty.
She received this grant in 2018, she learned the art of sewing Josée declares that before she was given this support, she was living a miserable life because there was no place where she could make money, she depended on money from her husband who worked at a tea shop.
According to Josée, that five hundred thousand she was given, bought four sewing machines and other accessories used in sewing like cotton and others.
“This money they gave me was very helpful to me because it lifted me out of poverty to a great extent. I bought four machines and other sewing equipment, and I made my own sewing house and paid house rent for the shop where we work. Two months later I saw a tender for sewing students’ uniforms and I gained Rwf 500,000 from that. Then I bought three more machines, now I have seven machines. I use one then I rent others for ten thousand per month, this tender helped me to pay off this loan on time,” she said.
“From sewing, I earn about one hundred and ten thousand per month, but I also managed to buy fifty chickens, which give me at least forty-five eggs a day, which means per month I earn at least Rwf 135,000 from eggs. This money, even if I deduct the money to buy utensils, pay for the house rent where I work, and pay for the chicken feed and their staff, my monthly salary is around Rwf 70,000 and I take care of my family and help my husband in some house activities.”
Josée says she will not go back for another loan because she intends to expand her business by sewing bridesmaids’ clothes, buying a laundry machine, and owning a shop for selling tissues.
Ahishakiye Bernard, a resident of the Mwendo sector in the Ruhango District who is also one of the recipients of the Rwf 500,000, has learned skills in women’s hair care and nails. According to Bernard, who has a wife and two children, he was helped by the money he was given because he was jobless for two years.
Bernard says the money he received in 2017, became the beginning of the better life he has now. The money he received was used to buy utensils, hairdryers, chairs, and other equipment and rent a house.
He said: “at the beginning of my project, I was the only one in my area who had a salon, and I immediately started seeing a lot of customers because elsewhere they used to go as far, taking more than thirty minutes on foot. It (the salon) helped me pay off the money in a short time. It also gave me the power to take a loan from a bank and build two houses, one which I live in and the other I rent. Now that I have repaid this loan I have been given by a bank and the money I have earned from my profession I use to take care of my family. Per month, I earn about Rwf 180,000, including those I do for work and others from my house which I rent.”
In a month, Ellie says, they receive 10 to 20 applications depending on businesses’ seasonality. However, clients lack technical know-how in their businesses while others don’t clearly know the business need and what to apply for. Others do not have the working capital to operationalize machines nor experience of the market and track record of their businesses, he adds.
Though the youths are appreciative of the grant, the grant is not enough, adding that it should be more than Rwf 500,000, which will help them to make a big project without any problem.
After seeing that the money they invested in the toolkit program is not enough for the receivers and after hearing their opinions, Elie said that in 2021, BDF launched a new program called micro leasing. In this program, they give youth five to ten million Rwandan francs. In this new program, the receivers will pay 75% of the loan and 25% is a grant.
Currently, among the youth that has received the toolkit 5403 are female, and male are 6183. The total amount that BDF has disbursed in the toolkit program is about Rwf 4.4 billion.