The youth entrepreneurship programme (YEP), announced by Prime Minister Bruce Golding in May as a $250-million loan facility for out-of-school youths, and part of a $2.25-billion stimulus package to the small-business sector, has practically been yanked from the government's funding plans, with only $10 million available to the start of the initiative.

Harold Davis, executive director of the Jamaica Business Develop-ment Corporation (JBDC), confirmed this week the drastic cut in the programme's funding and indicated that it has not yet got off the ground.

He told Wednesday Business that the programme would now only be able to cater to 100 youths, which is a far cry from the 1,000 it was promised would have benefited when YEP was first mooted to create employment and career opportunities for young Jamaicans who were unable to move on to higher education.

In May, the Development Bank of Jamaica (DBJ), the state agency earmarked to administer the funding, announced that it would provide J$200 million for on-lending to graduates of secondary, tertiary or trade training institutions via approved micro-finance institutions. The 1,000 graduates were to have received training and money as seed capital for the development of micro businesses.

First phase

With a limit of $100,000 per person, the programme cost will run to around $10 million, and not the projected $200 million for the first phase.

YEP is intended to encourage youth entrepreneurship in micro-business, farming, beauty and spa services, retail and trading, light manufacturing, fish farming (food and ornamentals), livestock projects, development of protected cultivation, such as greenhouses, ornamental fish farming and agro processing.

But funding apart, the JBDC's Davis said getting the information to the targeted beneficiaries was a challenge from the outset.

"The programme was announced at the end of the school year so youngsters were not prepared. Going forward we have discussed a new way of building awareness. Similar programmes have worked elsewhere in the world and have been successful," he said.

The first batch of students to be assisted under the newer YEP programme are June 2009 graduates recommended by their educational institutions.

Graduates must exhibit an interest in self-employment and will be required to participate in training seminars to be conducted by several government agencies.

They are also to prepare business plans and the projects should demonstrate the potential for financial and technical viability. Loan security is to include a promissory note, plus lien on fixed assets or equipment purchased.

While a maximum of J$100,000 per individual will be loaned, a group of four persons will be able to access a maximum of $400,000 for one project. Interest charged will be 10 per cent per annum on the reducing balance fixed for the life of the loan.

Repayment period

The repayment period for individual loans will be up to 12 months, including a maximum of six months moratorium on principal.

But notwithstanding the programme's near emaciation in funding and late start, Davis is optimistic that, based on the success of the business component of youth programmes already in place at the JBDC, YEP can still be a success.

The Building Youth for National Development Programme (BYND), for example, was implemented by JBDC in 2003 with grant funding. It targeted entrepreneurs aged 17 to 35 and 414 projects have been approved for funding.

"Business areas in BYND have been very successful. We have placed them in small business and strengthened the small businesses in which they are apprenticed," he said of the participants in that programme.

In a phase of the BYND which just ended, $50,000 was provided per project, with groups of five persons receiving as much as $250,000.

Phenomenal success

"It has gone very well. The businesses started with hand-holding. Training and post-grant monitoring have had a success rate of 70 per cent. That is phenomenal. For new businesses, the mortality rate is usually about 70 per cent."

Davis said businesses started under the programme included farming, fashion, craft jewellery making, and ornamental fish.

"The music component has also done well, helping youngsters with toolkits to start businesses, providing voice training, professionally done biographies and demo CD, plus training in promotions."

Davis noted that the JBDC is in negotiations for funding for the third stage of this programme, which includes business attachments through the National Youth Service, and the JBDC.

avia.collinder@gleanerjm.com