With a combined commitment of GH¢10billion, government has signed a contract for the YouStart Commercial Programme with the Ghana Association of Bankers (GAB) and 13 leading banks.
The three-year commercial programme – with a commitment of GH¢10billion -guarantees that YouStart will serve as the main engine for producing one million jobs for the next three years.
Through YouStart, government aims to provide capital and technical assistance to young people (18 to 40 years old) and youth-led enterprises to help them launch, develop and expand their own businesses. Three programmes – District Entrepreneurship, Commercial and Grace – are the foundation of YouStart’s approach to reducing unemployment in Ghana.
At the YouStart Commercial Programme’s signing ceremony with the banks, Ken Ofori-Atta, Finance Minister, said the commitment of GH¢10billion in this three-year programme is daring and will enable government to take a ‘big bite’ out of the enormous problems the country faces.
“So never in our history have we made such a bold commitment like a GH¢10billion three-year programme to see how we can really take a big bite out of the enormous problems that we have which can lead to very unsettling circumstances in the future, or radicalisation and all of that,” he said.
According to the Ghana Statistical Service, the unemployment rate for people between the ages of 15 and 35 is 19.7 percent. Even among individuals who appear to be employed, 50 percent are categorised as underemployed.
The finance minister emphasised the urgent necessity for these institutions to continue providing affordable capital, notwithstanding the risk to stability of the banking system.
Financing Arrangement
The Commercial Programme will provide Programme recipients with a conventional loan product from Participating Financial Institutions (PFIs) ranging from GH¢100,000 to GH¢500,000 to support working capital needs, demands for business expansion and the acquisition of equipment or machinery.
The banks will use their own internal sales channels to sell the standardised loan products (also known as ‘white label’ products) at a pre-set interest rate. The loan product, the loan application process, and the loan requirements will all be standardised by government and the Ghana Association of Banks (GAB).
Under the GH¢10billion, government will contribute a portion of the programme money to the commercial programme, and the PFIs will be expected to match government’s funds based on an established ratio and a planned standardised product.
In order to encourage the development of sustainable businesses, the National Banking College will also complement this offering by providing training in entrepreneurship and fundamental financial literacy to young business owners.
“From the Programme’s early days, I maintained that we could not move forward without the full support of our PFIs. Truly, we must all work together (public and private sectors) to ensure we create a culture and mindset that leaves our young people unafraid to challenge themselves,” the finance minister noted.
