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Lending, a way to restore confidence in young talents


In 2020, Ghana is faced with 12% youth unemployment and more than 50% underemployment, both higher than overall unemployment rates in Sub-Saharan African countries. Despite major investments by both government and private sector, this challenge will intensify if job opportunities remain limited. YEFL has developed a comprehensive Entrepreneurship Bootcamp training manual that takes young people through the whole process of training entrepreneurs. YEFL helps youth to find their way of preferences, and helps them to start up their own business in addition to going through a Village Savings and Loans approach.

The problem

Most of the time, youth have their ideas, they can work on a certain area, and they have the knowledge and skills to do it. It was the case of Magdalene. She was able to fabric woven smocks, she had her idea of business, and she was enough qualified to do it. However, something was missing to start her business. CAPITAL. Starting a business cost money, and when the youth have nothing, or not enough through their savings, it’s just not possible to start.

Our solution

Funding is the solution to start Magdalene’s business. However, Revolving Loan Scheme managed by YEFL has decided to help solve this problem. Thanks to its “Youth Life Project” in collaboration with Catholic Relief Services (CRS), YEFL delivered a revolving loan of $78 to Magdalene, in February 2022.

With the $78 lent by YEFL, Magdalene bought a full box of threads. A full box of fabrics includes 8 packs of different fabrics, with 12 pieces in each pack. So it means 96 pieces of fabric for $78. With woven smocks fabrics, which are fabrics that both genders can wear as casual clothes or for occasions, Magdalene can create any type of clothes, in any type of style! Her fabric preference is for striped and very colourful fabrics, which bring a good mood to the outfit.

Some of Magdalene's work.

Magdalene receives roughly five or six orders every month on average, with some months receiving fewer and others receiving more. She could end up with roughly $71 at the end of the month, with around $30 in profit. This profit means she doesn’t need to have money from YEFL again. For now, she gave most of her money to her auntie, because she lived with her and she is thankful for the education she gave her. It also allows her to use and pay for transport, the cost of hairdressing, her makeup and creams, and also to go to church more often. Later, Magdalene has a plan to save more in her bank account. She already has one, with $65 on it. However, her profit isn’t what she could expect for now, because she faced some challenges.

First of all, today, Ghana knows the highest inflation since 2009. It means that prices increase a lot, indeed, 5 Ghanaian cedi was $0.65 in February and $1.04 today. Prices of items are high, and Magdalene as well as all the population can buy fewer things than before with the same amount of money. Inflation is difficult to manage, and people can only endure this difficult situation, and it could impact a lot on small businesses such as Magdalene’s.

Furthermore, production cost could be high for the seller, so Magdalene has to, at first, manage her costs of production. If not, she could be at loss, and this is opposite to the goal of her business. Magdalene has a plan to diversify what she offers. For this, she wants to design T-shirts, and she also plans to diversify her patterns. She is going to organize her business too, by doing a market analysis and keeping a financial record, to find more customers, and extend her business. This could allow her to have additional income, and own a shop one day. Magdalene is passionate about her work, and a dream for her would be to train someone to sew in some years to come and teach everything she knows about her business.

During her interview, Magdalene told us several times how much grateful she was. The thing which touched me the most during this interview was the feeling of how Magdalene was grateful for all of this help, and when she confided that this experience with YEFL helps her to increase her level of confidence. Finally, YEFL allows a young girl with talent, ambition, and hard work to be able to become independent, prosperous, as well as more confident than ever!

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