Youth investment facility: what’s in it for young entrepreneurs?

The government is set to establish and operationalise the Youth Investment Facility (YIF) to foster entrepreneurship among the youth over the next five years. This initiative is part of Rwanda's new Private Sector Development and Youth Employment Sector Strategic Plan (PSDYE-SSP), running until 2029. ALSO READ: Over 6,000 Rwandan young entrepreneurs to secure funding The plan targets the creation of 250,000 productive and decent jobs annually, with a focus on skills transfer, workplace learning, and digital platforms for job matching. One of the key strategies to meet this target is the establishment of the Youth Investment Facility, according to the Ministry of Finance and Economic Planning (MINECOFIN). ALSO READ: New scheme to ease youth access to finance The Youth Investment Facility (YIF) is also embedded in the Five-Year Youth Sector Strategic Plan (2024–2029), which requires Rwf49 billion for implementation, as announced by the Ministry of Youth and Arts (MoYA). A major component of the plan [youth economic opportunities and entrepreneurship development] will need Rwf12.7 billion, with between Rwf2 billion and Rwf3 billion expected each year. The facility to be established by the Ministry of Youth and Arts under the support of various institutions such as labour and finance ministries aims to ease access to finance for start-ups and SMEs led by young people. To this end, the ministry will work with financial institutions and fintech firms to design youth-friendly products, including low-interest loans, reduced collateral requirements, venture capital, and microfinance schemes. ALSO READ: Youth in agribusiness push for access to finance It also plans to partner with the Business Development Fund (BDF) and commercial banks to expand funding for established youth businesses. The initiative includes financial literacy training at youth centres and the formal establishment of the Youth Employment Investment Facility. The broader goal is to reduce the national unemployment rate from 14.9% to 12% by 2029 and reduce the percentage of young people who are not working, studying, or receiving job training to only 23%. The facility will support skill development in priority sectors such as manufacturing, energy, transport, and logistics to help bridge the mismatch between labour supply and market needs. What experts and start-ups expect Experts argue that access to affordable finance is a major barrier for SMEs and young entrepreneurs in Rwanda. High interest rates and strict collateral requirements limit the ability of many to secure capital for growth. “Micro, small, and medium enterprises make up 97% of Rwandan companies, yet only 15% have access to finance. We cannot sustain or grow our economy with such low financial inclusion. We need mechanisms to increase start-up investment from angel investors,” said John Bosco Kalisa, a member of the Council of Small and Medium Enterprises of Rwanda (CSMER). Angel investors typically support early-stage businesses in exchange for equity or future returns. Kalisa noted that Rwanda could soon join the ranks of leading African countries in attracting start-up funding. ALSO READ: What Rwandan SMEs expect from $10bn AfCFTA Fund in 2025 At present, the big four—Kenya, Nigeria, South Africa, and Egypt—dominate this space. Kenya alone attracts nearly 30% of the continent’s start-up investment followed by Nigeria, South Africa, and Egypt. “Rwanda is emerging as a strong contender thanks to key enablers such as affordable internet, a growing talent pool, and a supportive regulatory environment,” he added. He also cited Rwanda’s progress in digitising public services as an advantage that can help scale new businesses. Through the proposed facility, young Rwandan entrepreneurs could gain capacity to be able to benefit from greater access to regional markets such as the East African Community (EAC) and the African Continental Free Trade Area (AfCFTA). “Rwanda has all the prerequisites to become a continental leader in start-up innovation. The government’s support will empower youth to become job creators rather than job seekers. We hope to see significant job creation by 2035,” he said. Kalisa believes the private sector will be the key driver of this transformation. Banking reform needed He also highlighted a major challenge: “Banks are generally risk-averse and unwilling to lend to start-ups.” This conservative approach, he said, is an obstacle that frustrates entrepreneurs with viable business ideas. “We need a shift in banking culture. Start-ups aren’t looking for handouts—they need fewer barriers and more accessible financing,” Kalisa said. ALSO READ: RSSB to launch Rwf30bn equity investment facility for SMEs Agnes Wambui, Founder and COO of Wekraft Ltd, an education technology start-up founded in Rwanda in 2023, echoed similar concerns. “As a young company, it's very difficult to get financing from traditional banks. They demand collateral we simply don’t have,” she said. Wambui added that most of their support came from winning innovation competitions rather than accessing financial services. “There’s a real gap when it comes to financing through regular banking channels. That’s why the Youth Investment Facility is so important.” Gilbert Eweme, Continental Coordinator of Accelerate Africa, an organisation that supports African startups , reiterated the need for capacity building and better access to finance and markets for youth-led start-ups. “This will allow them to leverage the AfCFTA,” he said. Accelerate Africa operates in 10 countries and supports nearly 2,000 SMEs across sectors such as agribusiness, digital services, creative industries, and renewable energy. He said the programme has already facilitated around $200,000 in funding for youth ventures. A recent boot camp in Rwanda attracted 100 start-up companies to explore financing and partnership opportunities, he noted. “We’re seeing promising discussions between founders and investors, particularly regarding equity investment,” Eweme noted. Noël Nkurikiye, Managing Director of COTATRARWA, which offers services to optimise transport and manage regulatory compliance, said the Youth Investment Facility should go beyond funding. “It should also train youth-led businesses on how to scale into regional markets,” he said. Nkurikiye explained that young businesses typically struggle with securing bank loans, which limits their growth. “We need access to capital to expand. That’s our biggest challenge.” According to the 2020 FinScope survey, only 16% of youth entrepreneurs in Rwanda had accessed loans from formal institutions in the previous year. This indicates a high degree of financial exclusion, with most youth relying on informal sources. The five-year youth plan aims to double this figure—targeting 32% of youth entrepreneurs to be accessing formal credit by 2029. The Youth Investment Facility could play a pivotal role in achieving this goal, ensuring that more young people are financially included and empowered to contribute to Rwanda’s growing economy.

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Youth investment facility: what’s in it for young entrepreneurs?