Agreement will strengthen microfinance support for both low income and university graduate entrepreneurs.
Somalilandsun – Silatech has signed a Memorandum of Understanding with Kaaba Microfinance Institution (K-MFI), based in Somaliland, to promote youth enterprise and employment solutions. The agreement paves the way for the two organizations to jointly develop a Youth Enterprise Fund, which will provide dedicated funds and technical assistance to microfinance institutions throughout Somaliland. The objective of the Fund is to incentivize Somali MFIs to increase lending to young people.
The Youth Enterprise Fund will create two youth-focused products specially designed for different socioeconomic groups. One will be tailored for the needs of low income existing youth microenterprises, while the second will be designed for university graduates looking to start their own businesses. Both are shari’a compliant microfinance products. Also contributing to the Youth Enterprise Fund is AFIF, a non-profit Qatari development program launched by Al Asmakh Charity Foundation and a consortium of other social investors and donors.
The initiative is set to support over 3,000 Somaliland based youth enterprises access appropriate financial service combined with business training and support over the next 3 years. It is expected that these enterprises will sustain or create over 5,000 new jobs as they grow.
Youth microenterprise is of particular significance in the Somali territories, given that approximately 70 percent of the population is below the age of 30. With unemployment rates greater than 65 percent, and with few formal sector entry points into the workforce, many Somalis end up as microentrepreneurs in the informal sector by necessity. Access to formal financial services remains in the single digits meaning that many of these enterprise struggle to obtain capital to grow and create jobs.
Speaking at the signing, Silatech CEO Dr. Tarik M. Yousef said “Both Silatech and Kaaba Microfinance are committed to empowering Somali youth by making financial services available and helping them to start and sustain their own businesses. We believe that, together, we can help to spur income generating activities, alleviate poverty, and encourage entrepreneurship and positive change.”
Agreeing with Dr. Yousef, Chairperson of Kaaba Mrs. Fadumo Alin said, “The change both our organizations are seeking to make in the lives of the Somali youth will not come if we wait for a miracle, or if we wait for some other time. We are the ones we’ve been waiting for. We are the change that we seek. It is true that the deepest happiness one can have comes from helping to relieve the suffering of others–and this is exactly what we want to do together.”
Based in Doha, Silatech is a regional social initiative that works to improve employment and entrepreneurship opportunities for young people throughout the 22 countries of the Arab world. With projects in 11 Arab countries, since 2009 Silatech microenterprise partnerships have supported more than 52,000 youth businesses start or grow and provided assistance to more than 200,000 young people. Silatech is the largest provider of youth-focused microenterprise services in the Arab World.
Kaaba Microfinance Institution is the longest serving microfinance institution in Somaliland. With a loan recovery rate of 98 percent, it is financially sustainable with a strong track record of managing donor funds. Kaaba MFI was founded with the mission of providing demand-based financial services to low-income and vulnerable Somali groups (particularly women & youth) to become agents of change through improved access to finance. The parent organization of Kaaba MFI is Doses of Hope, an NGO founded in the Netherlands in 1997 and operating in Somaliland since 1999. Doses of Hope is focused on empowering the financial independence and integration of the less fortunate and vulnerable groups in Somalia into active members of their community.
© Press Release 2014
