The International Trade Centre’s (ITC) Gambia Youth Empowerment Project (YEP) and the Social Development Fund (SDF), a non-profit organization, today announced the launch of the Mini-Loans Scheme, which will increase access to finance for youth-led micro, small and medium sized enterprises (MSMEs) in The Gambia.
Through this new, joint initiative YEP and SDF will offer loan products with a reduced level of collateral and interest rates to young entrepreneurs across the Gambia. This scheme complements other components of the YEP, such as trainings, market linkages and the mini-grant scheme already in place for grass-roots entrepreneurs.
‘This initiative will increase access to finance for young entrepreneurs currently not eligible or not able to access bank credit,’ said SDF Director-General Sonko Fofana. He added. ‘Following an international competitive procurement process, the SDF signed a partnership agreement with YEP for the implementation of the Mini-Loans Scheme.’
YEP Project Manager Raimund Moser highlighted the importance of the scheme for job creation. ‘In the Gambia, access to capital is one of the biggest bottlenecks for youths to set up and grow their businesses,’ he said. ‘The scheme will facilitate access to financing for up to 580 youth-owned enterprises, with the objective to drive growth and create jobs’ he added.
European Union Ambassador to The Gambia Attila Lajos stressed the important role the private sector plays in accelerating inclusive development in The Gambia. ‘The launch of the mini-loan echoes the commitment of the European Union to support innovative ways of finance and to strengthen the private sector-led growth’ he said.
In his launching statement, the Minister of Trade, Industry Regional Integration and Employment, Amadou Sanneh, pointed out that youth empowerment is at the centre of the government’s development agenda as stated in the National Development Plan. He encouraged the youth across the country to take advantage of this opportunity. He also urged the business support institutions, both in the public and private sector ‘to provide the necessary support and guidance to the target beneficiaries particularly in the rural areas to optimally utilise this opportunity and create the much need quality jobs and wealth especially for young Gambians’.
The Mini-Loans Scheme aims at facilitating the acquisition of small machinery and equipment, acquisition of new premises, improvement and expanding of existing premises, and working capital for young entrepreneurs desiring to grow their businesses and already established small-scale businesses. The target beneficiaries for the scheme are young entrepreneurs who have successfully completed a course or programme on skills, entrepreneurship or business management. Initially, only youth that benefited from a YEP-funded training programme will be eligible. However, as of 1 January 2019, the scheme will be accepting applications from Gambian youth that have completed skills or entrepreneurship trainings with other institutions.
The average loan amount per beneficiary is GMD 150,000 ($3,000). The amount of financing to a single beneficiary is dependent on the application assessment and business plan proposed, but will not exceed GMD 480,000 ($10,000). The loan term will be a maximum period of 12 months and a minimum period of 6 months per loan cycle. A maximum annual interest rate of 10% be applied.