Activation Policies for the Poor in OIC Member States
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orphans themselves, being former abductees and experiencing domestic violence. The programme
intends to encourage improved flow on income using a household empowerment approach that
provides mind-set change training and business follow up support. NUYEP is funded by the
Department for International Development in the UK and Enterprise Uganda acts as the Project
Implementation Agency for the project.
The project aims to:
 Support 10,500 beneficiaries of whom 80% are young people aged 18-35
 Target the creation or expansion of 5,000 sustainable youth and family-owned enterprises (3000
male-owned, 2000 female-owned). 1,000 of these enterprises should create an additional job.
Enterprise Uganda is delivering its 6-step Youth Empowerment Programme to NUYEP beneficiaries.
The programme comprises:
1 Entrepreneurship Awareness and Mobilisation
2 Business and Enterprise Start-up Tool (BEST)
3 BEST follow up workshops offering follow on support
4 Specialised Business Skills Clinics
5 One to one Volunteer Mentoring and Business Counselling Services
6 Linkage to finance, with a focus on Savings and Investment Clubs and Savings and Credit Co-
operatives (SACCOs)
A unique element of Enterprise Uganda’s approach is their mentoring component matching aspirant
young entrepreneurs (one to one or in a group) to established, qualified business mentors with the
aim of fostering innovation, generating business opportunities and creating new jobs. A business
mentor is a ‘volunteer, an experienced professional; an unbiased encourager, advisor, sounding
board, listener and facilitator.’ Mentors are trained to mentor effectively and provide regular
business health checks and problem solving support to their mentee.
The two projects mentioned above address the fact that the education system does not encourage
entrepreneurship. However, it is not enough to encourage entrepreneurship. Innovation must be
taught as a key success criterion. In Uganda, business ideas can lack innovation and would be
entrepreneurs do not readily seek gaps in the market. This has been identified as one of the reasons
why Ugandan firms have a high failure rate in the early start-up period.
The two projects also address a significant challenge affecting the promotion of entrepreneurship as
a tool for job creation. Entrepreneurs and agricultural workers in particular have difficulties in
accessing credit. Young people often face difficulties due to their lack of collateral. Agricultural
workers on the other hand face reluctance from lending institutions because of the long term nature
of investments. If agricultural workers can secure loans, credit to purchase business inputs is often
received too late because the seasonality of agriculture is not understood by creditors. Furthermore,
loans in Uganda have high interest rates attached to them of around 20%. Interest rates for certain
projects, such as the Youth Venture Capital Fund, have been capped (at a rate of 15%) but caps
reduce the incentives for financing institutions to provide loans. To address these issues, some micro
finance organisations are trying to develop youth related products and encouraging group lending
which could improve access to loans for the rural youth.
Better access to credit is needed because lack of credit not only prevents would-be entrepreneurs
from setting up a business, it also prevents established businesses from expanding. On average,
businesses in Uganda only have two employees. Loans would allow these businesses to expand,
although the provision of management and business planning training would also be required.
In order to address the difficulties agricultural workers face in securing loans, lending schemes have
been set up which link loans to production. For example, a successful public-private partnership
with Bidco Uganda Limited, a processor and marketer of vegetable oil has been set up. Under this