In Eswatini (formerly Swaziland), two of the primary barriers to successfully establishing new entrepreneurship start-ups, especially among youth and women, is lack of access to capital as well as lack of guidance and coaching that facilitates knowledge transfer from a more experienced generation to the younger generation. Lack of readily available credit facilities limits the ability of the integration of innovation solutions progression into mainstream business applications. The country still needs to consider developing employment and entrepreneurship policies to integrate the youth into the labour market.
Renewable energy is a sector that has been prioritized by the government as the country only produces 16 percent of its energy domestically. Waste management is in its infancy in the country, with only rudimentary waste collection systems in place. Waste separation is very limited, and the logistics of collection and reprocessing have proven to be a challenge. Enhancing this sector could provide women and youth access to employment and opportunities to establish start-ups.
Towards a Solution
The SDG Empowerment Fund and the range of services provided under the fund provide a catalytic environment to address a range of development challenges in line with national priorities, and in areas where there is demonstrable need and interest. By targeting renewable energy and energy efficiency and waste management, the Fund provides critical support to supporting the development of a sector that has demonstrated potential, but that is held back by limited access to knowledge and experience from a business perspective and access to financial resources. By prioritising youth and women, the project aims to contribute to creating employment and income generation for two of the most vulnerable groups in the country. As the Fund does not “just” provide financial resources but also provides coaching and guidance to participants and enhances the chances that the capital provided provides return in investment in terms of economic and social dividend.
Entrepreneurs, youth, women and communities can submit proposals in support of renewable energy and waste management solutions to the Fund through a partner commercial bank, Standard Bank Eswatini. UNDP used part of the funds to set up a Loan Guarantee Scheme within Standard Bank to enable the bank to issue collateral free loans for the youth and women enterprises. In addition, Standard Bank increased the value of the fund by issuing loans double the guarantee funds available. UNDP has also partnered with the Royal Science and Technology Park (RSTP) to provide capacity building and business advisory services for candidates qualifying for the loans. RSTP is a public enterprise established as a hub for stimulating the knowledge-based economy.
The Fund is composed of the following components:
- Fund management: Entrepreneurs, youth, women and communities submit proposals in support of renewable energy and waste management solutions to a partner commercial bank. Recipients will pay back the loan based on revenue generated from the new enterprise or from cost avoidance generated by the new technology (in the case of solar). UNDP provides security for the loans and will only pay out in case of defaults.
- Using youth-targeted advocacy and communication, the project promotes information sharing to create awareness on the need for adoption of science and technology careers and use for innovative approaches to socio-economic growth.
- Capacity building is provided for the youth’s greater interaction for skills development. This is provided for corporate governance skills development; organizational and systems development; business management; access to credit and credit management; partnership building for mentorship, coaching and job shadowing; and incubation of ideas. The mentoring and coaching space is facilitated by RSTP through a pool of seasoned and experienced entrepreneurs and executives.
- Networking and partnerships are promoted to enable further engagement of the private sector. Solutions for small enterprises are also promoted for implementation in local governments and rural communities. An increased demand for the services is expected leading to increased financing for such enterprises by commercial banks and other financiers.
- Knowledge creation, exchange and management through South-South and triangular cooperation is promoted at national and regional levels to expose the youth to information and knowledge which is expected to ‘spark’ socio-economic solutions leading to entrepreneurship and business entity development.
Results achieved among others include agreement with Standard Bank to double the available funds when issuing loans to the youth and women enterprises.
Countries/territories involved: Eswatini (formerly Swaziland)
Supported by: UNDP Country Investment Facility
Implementing entities: UNDP Eswatini; Ministry of Information and Communications Technology (MICT); Ministry of Natural Resources and Energy; Ministry of Economic Planning and Development; Royal Science and Technology Park (RSTP); Eswatini Environment Authority (EEA); Innovation Association of Eswatini (IAS)
Project Status: Ongoing
Project Period: 2018-2020
URL to the practice: www.itbi.org.sz
Name: Gugulethu Dlamini
Title: Programme Analyst, UNDP Eswatini
Email address: email@example.com