Two of the most important strategies for youth asset development are savings and entrepreneurship. Most young people, particularly girls, however don't own the assets they can sell or use as collateral to start a business or other income-generating activity. The Youth Lending and Saving Association model has been rolled out by SNV in the Opportunities for Youth Employment project in Rwanda, Tanzania and Mozambique, to allow young people to accumulate savings and take out loans; to grow their business.
The youth saving and lending association (YSLA) model has been implemented amongst almost all young people participating in the project. Currently, approximately 260 OYE Saving and Lending Groups are active. The groups have an average of 5200 members who all completed their YSLA training and started operations by saving up and getting loans. Most of the YSLAs are linked to group-based or individual enterprises, as well as employed young people. This has offered a great opportunity to focus YSLA on concrete entrepreneurship initiatives.
Improved cook stove Cooperative Members of Rubavu District - Rwanda
OYE YSLAs are linked to agriculture and renewable energy business entities (e.g. cooperatives). This increases young people's commitment to saving, and their ability to acquire loans, which they are able to invest economically and pay back. Being able to save and get loans, gives them a sense of hope and empowers them with practical skills that can help them to plan their future.
In addition, we saw these YSLAs become strong social networks with young people who understand each other and share their ambition to secure decent work or grow a business; to pursue their goals as young entrepreneurs and workers.
One example of a successful YSLA can be found in Rugerero Village, in Western Rwanda. The group is comprised of 18 young people who are trained in improved cook stove production. The average share-out of the group is US$ 25 per member since they started in December 2016. Following this trend, the group will have a capitalisation of about US$ 1,000 or more by 2019. SNV analysed three additional YSLA, two were associated with biogas cooperatives in Rulindo & Musanze Districts and one with a solar group in Gisagara District. All three associations matured with capital with around US$ 1,500.
The project has been able to observe some immediate positive behavioural effects such as acquisition of domestic and business assets which mirrored how young people involved in a YSLA have improved their general living conditions. It is easy to see that participating young people gained a greater sense of self-determination and opportunities.Some of the YSLA groups are able to increase investments in the group-based enterprise for example in the case of most improved cook stoves cooperatives to increase production; others choose to diversity their businesses or use their capital as collatoral for formal financial services with SACCOs (Saving and Credit Cooperatives at administrative sector level).
HIGA YSLA – Improved cook stove Cooperative of Rubavu District - Rwanda
Filling out a booklet, keeping track of deposits and loans
During the youth coaching sessions to continuously mentor young graduates on entrepreneurship and employment, we realised that providing training on youth savings and lendings associations to graduates is pivotal. The associations provide an environment for young people, to turn theory into action in a manner that will wield practical rewards.
The synergy between youth saving and lending association and entrepreneurship is the key to development.