YERF to introduce satellite offices in a bid to increase uptake of loans

By Phiwa Sikhondze

In a transformative effort to enhance youth entrepreneurship, the Youth Enterprise Revolving Fund (YERF) is set to launch satellite offices and introduce a comprehensive capacity-building model.

This initiative aims to address the critical gaps in service accessibility and entrepreneurial education, marking a new era of opportunity for young business enthusiasts in Eswatini.

Speaking at Eswatini TV’s Market View programme, Mandla Nkambule, the Chief Executive Officer (CEO) of YERF, announced this strategic development as part of their ongoing efforts to make the Fund more accessible to young entrepreneurs.

“We do have a strategy from 2022 to 2025, in the strategy, we identify the gaps in our operating model. One of the gaps we identified, which we acknowledged, was the low uptake of the loans. We identified the gaps in the operating model and then the strategy came about with the modernization of the operating model. One thing we identified as a quick win was the decentralization of the services,” Nkambule said.

Established in August 2009 by His Majesty King Mswati III, the YERF has been instrumental in combating poverty by providing financial assistance to young entrepreneurs. Despite its noble intentions, the uptake of loans has been modest, with just over a thousand beneficiaries in nearly 15 years.

The CEO noted that the satellite offices will add to regional offices that have been opened in all four regions of the country, leading to an increase in daily visitors seeking services. This follows the observation that having regional offices alone is not enough to ensure that the service is brought closer to the youth.

The new satellite offices approved by the board are envisioned as a one-stop shop that will house various ministries’ parastatals, including the Ministry of Sports, Culture, and Youth Affairs, as well as the Eswatini National Youth Council. The first of these offices will be set up in Sithobela, followed by Hlatikulu and Piggs Peak, where a partnership with Piggs Peak Town Council has been formed.

Capacity Building Model

On another note, YERF is taking a critical look at its capacity-building model, reviewing the model to better equip young entrepreneurs for success. The CEO highlighted the need for a more effective approach to support young entrepreneurs in sustaining their businesses.

According to Nkambule, many loan applications to YERF have been declined due to poor business plans and a lack of understanding of financial management.

“50% or plus of all our applications have failed the test due to poor business plans, lack of understanding of the business plan, cash flow forecast, and a lot of other things. You find that when you look at it at face value, the business is viable, but in terms of putting it up now properly in a document, it becomes a serious challenge for young people,” he said.

Despite the Fund’s efforts since its inception, a significant number of loan applications have been unsuccessful due to poor business plans and a lack of understanding of essential business concepts like cash flow forecasts.

The current model, which assigns a mentor to guide new entrepreneurs for three years post-loan approval, has shown deficiencies, with many businesses still failing. As a result, Nkambule acknowledged that while YERF has provided mentorship to loan recipients in the past, it has not been as effective as desired.

In response, YERF is considering a shift in its strategy and implementing pre-entrepreneurship training, which will cover business plan development, cash flow forecasting, and other essential business skills. The proposed pre-entrepreneurship training aims to lay a stronger foundation for potential business owner.

“We want to ensure that young people who receive loans from YERF have a solid foundation in business practices. We believe that this training will increase their chances of success and reduce business failures,” Nkambule said.

The focus of the new capacity-building model is to instill confidence and resilience in young entrepreneurs. By ensuring they are well-prepared before they even receive funding, YERF hopes to increase the success rate of the businesses it supports.

Share With Friends