Strategy being plotted to cut poverty, youth unemployment - micro enterprises seen as key
By Desiree Jodah
May 5, 1999
Micro enterprises were touted as a means of reducing poverty and youth unemployment at the opening session of a two-day consultation on 'Youth Credit and Micro Enterprise' at Le Meridien, Pegasus yesterday.
The Ministry of Culture, Youth and Sports in collaboration with the Commonwealth Youth Programme (CYP) has sponsored the national consultation to develop a strategy for reducing poverty and youth unemployment.
Deputy Secretary-General of the Commonwealth, Dame Veronica Sutherland, in her keynote address, said evidence had shown that micro enterprises have great potential for resolving issues of poverty and economic marginalisation.
She said it was in this context that the CYP had responded by creating the Commonwealth Youth Credit Initiative (CYCI) in four regions of the Commonwealth.
The CYCI model builds on the Grameen Bank approach by providing credit to individuals who belong to a group saving scheme, and in providing training in business development, marketing and support extension services to young people. She noted that the CYCI is aimed at helping young men and women to liberate themselves from the doldrums of poverty through financial service programmes, access to credit and business skills, mentorship support and the establishment of small scale enterprises.
Sutherland said to date 129 young people have completed training in the CYCI pilot project in Guyana and 71 loans had been approved to establish small businesses in Georgetown and Linden.
Sutherland said many institutions involved in the delivery of micro credit did not have exposure to good practice in micro credit and lacked specific skills in co-ordination and integration of activities of stakeholders. According to her, this resulted in duplication and wastage of scarce resources.
She said that in July 1998, a regional consultation was held on CYCI and the Micro Credit Management System. The outcome of this consultation was the agreement by the CYP and the United Nations Development Programme to spearhead the formulation of a regional micro credit working group to develop an action plan and formulate strategies for micro enterprise development in the region.
She said evaluation studies so far in CYCI pilot projects have demonstrated that there have been significant successes in Asia and the Caribbean. Sutherland expressed the hope that the consultation would enable agreement on the best strategy that could be employed to replicate this project in communities throughout Guyana.
Youth Minister, Gail Teixeira, in her remarks, said a youth credit development programme entails the formation of marketable skills and social ethics among young people, availability of business support services for self-employment, a mentoring programme for young people, the availability of credit and finance for self-employed young persons and the promotion of leadership skills among youths.
Teixeira noted that partnership with the private sector, especially the financial institutions was vital to the success of the programme.
Managing Director of the Bank of Nova Scotia, Ian Cooper, told participants at the consultation that while commercial banks did not have an appetite for micro-enterprise lending, there were some who could probably be motivated if the government would grant them some concession.
Cooper said Scotia Bank which operates a successful micro enterprise scheme in Guyana has to pay $500,000 in licence fees per year. He opined this was probably not the best possible way to go. Concessions on taxes and duties on vehicles and equipment used by micro enterprises should be looked at, Cooper said. He suggested that the government could provide the funding for micro enterprises and let the commercial banks provide the administrative facilities.
Others attending the ceremony included Prime Minister, Samuel Hinds, Canadian High Commissioner, Alan Bowker, First Secretary of the British High Commission, Colin Brazier and representatives from various organisations and commercial banks.