Nairobi, November 28, 2016 The KCB Foundation, the social impact arm of the KCB group and IFC, a member of the World Bank Group, today announced the launch of a partnership that will improve the growth and sustainability of small and micro-enterprises (SME) within the informal sector across Eastern Africa.
This initiative was jointly announced by the IFC and KCB Foundation Executive Director, Jane Mwangi during the signing of a partnership agreement that brought together the 2jiajiri; Enterprise development program of the KCB Foundation and Business Edge; the IFC training program to improve management capacity and business performance of SME.
Despite evidence that the informal sector is the principal driver of economic growth and youth employment in Eastern Africa accounting for around 85% of new jobs in Kenya, young entrepreneurs in the informal economy continue to face significant barriers to the establishment and growth of their businesses.
The partnership between KCB Foundation 2jiajiri and IFC Business Edge programmes is part of the broader efforts by these two institutions to respond to the two main structural limitations facing the establishment and success of SME in the informal sector. The first limitation is inadequate access to financial resources, specifically start-up and working capital and the second is inadequate Business advisory services that are needed to effectively run an enterprise.
The 2jiajiri program is a flagship program of the KCB Foundation geared to support the creation of wealth and employment opportunities for the youth in Eastern Africa. It is designed to support the establishment and growth of up to 50,000 enterprises in the informal sector by doing three things; One, provision of scholarships for vocational training so as to improve quality of goods and services produced. Two, provision of Business Advisory Services through the deployment of a 3-member consultancy team drawn from a pool of fresh graduates from leading local universities to offer legal, marketing and financial management support to the SME. Three, linkages to markets for goods produced.
At the announcement, IFC emphasized that systems are required to impart relevant skills to the youth to enable them develop more business-oriented mind sets and fast track the process of job creation.
Small and medium enterprises are the backbone of African economies.Â IFC and KCB have been working together for several years to support the SME sector. This new partnership is yet another step towards helping entrepreneurs acquire the skills and knowledge they need to grow their businesses.â€ said Oumar Seydi, IFC Director for Eastern and Southern Africa.
Through this partnership, 55 BDS support consultants in the 2jiajiri programme have undergone world-class training under IFC’s Business Edge programme on how to enhance the performance of businesses in the informal sector. This is a novel approach that creates a structured relationship allowing the youthful White Collar graduates to serve their peers who are Blue Collar entrepreneurs.
The 55 trainees now join nearly 160,000 individuals across 67 countries that have undergone similar training in IFC’s Business Edge programme. They begin a journey that would open up new frontiers in consulting and advisory services for informal enterprises in Eastern Africa and could kick start the next generation of consulting firms in the style of internationally recognized consulting corporations.
Jane Mwangi, the Executive Director of the KCB Foundation said: We have plans to work with IFC and expand the program to additional university graduates in tandem with the growth of the program. In the long term, we also hope to acquire and continuously apply the Business Edge tools to enable us to enhance the content provided to the beneficiaries of the 2jiajiri program.
2jiajiri, which was launched early this year is expected to benefit at least 500,000 entrepreneurs in 5 years, thereby creating at least 2.5 million direct and indirect jobs.
Small and medium enterprises are the backbone of African economies. IFC and KCB have been working together for several years to support the SME sector. This new partnership is yet another step towards helping entrepreneurs acquire the skills and knowledge they need to grow their businesses said Oumar Seydi, IFC Director for Eastern and Southern Africa.
KCB has set aside at least KShs. 20 billion towards driving this enterprise development programme over the next five years, funds which will be used largely to support small and medium businesses run by the youth.