As Rwanda accelerates toward Vision 2050, demographic trends indicate a dynamic and expanding youth population. It is imperative that we meet the aspirations of youth (or we support them to do so) which includes the urgent need to create millions of high-quality jobs to match their ambition.

At UNDP Rwanda, we support youth entrepreneurship to help young people create jobs for each other.

For years, the global development sector and traditional financial institutions have looked at youth entrepreneurship through a lens of skepticism. Young people without collateral, formal credit histories, or years of business experience are frequently categorised as "high risk."

As a result, countless brilliant, viable business ideas remain unfunded, trapped behind the rigid walls of traditional commercial lending.

But what if this perceived risk is an illusion? What if investing in young, early-stage entrepreneurs is actually one of the safest, most lucrative economic bets a country can make?

Through the AGUKA Programme, a flagship initiative funded by the European Union (EU) and implemented in collaboration with the Ministry of Youth and Arts, we set out to test a different model. Instead of viewing youth as recipients of assistance only, we recognised them as engines of economic growth. We provide targeted seed funding, capacity building, and mentorship to help young entrepreneurs start and scale their businesses.

As we join the EU to celebrate Europe Day, it is the perfect moment to reflect on what the profound partnership between the EU and UNDP has yielded in Rwanda. The results, captured in the recent AGUKA Tracer Study (2022–2025), serve as evidence for financial institutions and other actors in the country to consider investing in youth entrepreneurship.

Here is why.

The data reveal that AGUKA has significantly boosted the economy. For every Rwf1 million invested in these youth-led enterprises, an incredible Rwf54 million in business income was generated.

Let that sink in. That is a return on investment that defies traditional market expectations.

Furthermore, this investment has facilitated the creation of over 128,000 jobs, including more than 30,000 decent, sustainable jobs. These young entrepreneurs are not operating in the shadows; they are actively driving the formal economy, having already generated over Rwf2.25 billion in national tax revenues.

We see this transformation every day. Consider Appolonie Niyongabire, the founder of Daily & Delivery. As a refugee, the traditional banking sector would likely have turned her away. Yet, with AGUKA’s support, she built a business that now employs five people.

Also, with Aguka’s support, Janviere Ingabire of Igisura Company Ltd. transitioned from a small, informal hustle into a formally registered, nationally certified company.

Niyongabire and Ingabire represent the untapped baseline of Rwanda’s potential.

Through AGUKA, the European Union and UNDP, in collaboration with the Ministry of Youth and Arts, have absorbed the early-stage risk. We have successfully developed, structured, formalised, and demonstrated the profitability of these businesses. We have built a pipeline of investable, tax-paying, job-creating enterprises.

Recognising that access to affordable finance remains one of the biggest barriers preventing youth-led enterprises from scaling, the recently launched Aguka Fund, established by the Ministry of Youth and Arts and the Development Bank of Rwanda (BRD) with support from UNDP, EU, United Nations Population Fund (UNFPA), and other partners, aims to bridge the gap between promising youth enterprises and the formal financial sector.

Through an innovative portfolio guarantee mechanism covering up to 90 per cent of loan principal, the Fund significantly reduces lending risks for financial institutions while expanding access to affordable finance for young entrepreneurs and artists.

Youth-led Micro, Small, and Medium Enterprises (MSMEs) and creatives can now access loans of up to Rwf10 million with reduced collateral requirements, while micro-businesses can benefit from mobile-money-based working capital solutions requiring no guarantee at all.

This is more than a financing facility. It is a structural shift in how we approach youth entrepreneurship financing in Rwanda. Often, young people are expected to accumulate personal wealth before they can access formal finance, yet many lack the means to do so.

Instead of requiring young entrepreneurs to demonstrate financial assets before being trusted with capital, the Aguka Fund takes a different approach—recognising their potential, performance, and demonstrated resilience as valuable and investable assets in their own right.

This approach sends a powerful message: youth are not too risky to finance; they are too important not to. This shift opens doors for youth who might otherwise be excluded, empowering them to grow their business and contribute to the economy.

Now, to truly scale these youth-led enterprises and maximise their contribution to our economy, the domestic private sector must step up.

International development partnerships are most effective when they act as catalysts for sustainable progress, rather than sources of dependency. The EU-UNDP partnership has successfully de-risked the youth market in Rwanda. But to truly scale these businesses, to turn them from national success stories into regional powerhouses, they need access to domestic commercial capital.

It is time for Rwanda’s commercial banks, microfinance institutions, and private equity investors to review the AGUKA data closely. We need to revise old risk-assessment models that unfairly disadvantage young people. The Rwf2.25 billion in tax revenue generated by these young people proves they are ready for the formal financial sector. The question is: is the formal financial sector ready for them?

On this Europe Day, we celebrate a partnership that has proven what is possible. The EU and UNDP will continue to provide steadfast support to Rwanda’s next generation. But sustainable, generational wealth will ultimately be built when local capital meets local innovation.

Rwanda’s youth have proven they can turn one million francs into fifty-four million francs. We should invest in them now!

The author is the Resident Representative of the United Nations Development Programme ( UNDP) in Rwanda.