Help Ugandans Help Themselves

Team Leader:

Kelsey Short

Team Information:

The Idea:

Help Ugandans Help Themselves

Today, Uganda faces an 80% youth unemployment rate—the highest in the world. In order to give their children an education, families often sell their land, their cows, and sometimes even their homes only to find that after graduation, the young adults are not able to find jobs. This leads to an inefficient system in which an educated young population, typically the change-makers in most countries, sits idly without the opportunity to implement their skills. Instead of prosperity, this kind of situation can lead to unrest and violence.
These educated young adults need a system that helps them create jobs and prosperity for themselves as well as for others in their communities. These young people are the hope for the country’s future, both economically and politically. They are full of great ideas to solve their communities’ biggest problems, but have no means to put their ideas into actions. Further, they lack the training and mentoring often helpful in starting a successful business. Currently, as in many developing nations, funds are only available through microfinance loans (typically targeted towards middle-age women), or through bank loans (to people who can show a history of good credit). However, there are substantial problems with these two systems. Microfinance loans typically are awarded in small amounts–$100-$200, and have extremely high interest rates. This is not enough money for educated people to truly start a business and help change the economic state of their country. Bank loans are problematic because they are only awarded to those who can show an existing history of credit. In Uganda, where most of the population is too poor to hold credit, only the wealthy are able to apply for loans. A significant part of the population is left out – those who grew up in poor households, but worked hard to put themselves through school.

A new loan system needs to be established. This loan system would involve mid-scale loans ($500-$1500) with interest rates just above inflation given to exceptionally bright Ugandan graduates of secondary school and University. The graduates would be required to present a thorough business plan. In order to facilitate this process, we would partner with existing community organizations and leaders who know the inner-workings of their towns. This system would help prevent fraud as leaders would be aware of town gossip as well as which individuals have truly exceptional character. I believe that the low interest rate will work as long as there is a high standard for accepting candidates.
This program is self-sustaining. Besides the funds needed for initial start-up, the money used to pay back loans would go to other loan seekers.

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