MICROCAPITAL BRIEF: Uganda Launches “Youth Entrepreneurship Venture Capital Fund”; Mobile Telecommunications Network (MTN), Uganda Youth Convention (UYC), Financial Empowerment Network (FEN) Launch Microfinance Savings Plan

Both the government of Uganda and a joint effort by Mobile Telecommunications Network (MTN), a mobile telecommunications company based in South Africa; Uganda Youth Convention (UYC), platform for empowerment and enterprise for youth; and Financial Empowerment Network (FEN), a local venture capital firm, recently launched programs to promote entrepreneurship and a “savings culture” among youth at a Job Convention for the Bunyoro Region of Uganda. The Job Stimulus Programme is a government program through which youth will get business management training and then may access funding for entrepreneurial ventures if they first save an unspecified amount of money. In addition, MTN, UYC and FEN have partnered to launch a product named “FEN Savings” through which the MTN mobile phone network may be used to save money.

Of the UGX 44.5 billion (USD 18.3 million) set aside for the Job Stimulus Programme, Finance Minister Maria Kiwanuka reportedly said that UGX 25 billion (USD 10.3 million) would be for the Youth Entrepreneurship Venture Capital Fund, which would lend to youth who are starting or expanding business enterprises. Also, UGX 3.5 billion (USD 1.4 million) has been earmarked to equip youths with business management skills to get jobs or grow their businesses. The expected number of youth to be reached has not been disclosed.

FEN Savings requires a subscriber to register with MTN MobileMoney, an electronic wallet service that enables users to send and receive money. Upon registration, a subscriber is issued a FEN Savings Pledge Card on which he or she makes a commitment to save a specified amount of money on a regular basis. Tony Miiro, the director of FEN, said the mobile savings product was developed because of the lack of a “savings culture” amongst youth limits their access to credit facilities offered by banks. Mr Miiro was quoted as saying, “You cannot access capital unless you participate in saving. Even banks ask you for financial statements.”

By Carol Kim, Research Associate

About Mobile Telecommunications Network (MTN): Established in South Africa in 1994, MTN is a multinational telecommunications group that provides cellular telephone service. As of December 2009, MTN provides its services to approximately 116 million subscribers in 21 countries in Africa and the Middle East. MTN reported in its 2009 financial statements total assets of ZAR 156 billion (USD 22.5 billion) and return on assets of 19.4 percent.

Sources and Additional Resources:

Mobile Money Africa: “MTN MobileMoney to Drive Youth Job Scheme in Uganda”, June 2011, http://mobilemoneyafrica.com/?p=3701

MicroCapital.org: “MICROCAPITAL BRIEF: Nigeria’s Guaranty Trust Bank (GTBank) Partnering with Mobile Telecommunications Network (MTN) to Offer Mobile Banking”, June 7, 2011, https://www.microcapital.org/microcapital-brief-nigeria’s-guaranty-trust-bank-gtbank-partnering-with-mobile-telecommunications-network-mtn-to-offer-mobile-banking/

MicroCapital.org: “MICROCAPITAL BRIEF: MasterCard Foundation of Canada Commits Additional $25m To BRAC’s “Microfinance Multiplied” Program in Uganda, With Plans to Open 40 New Branches”, April 15, 2011, https://www.microcapital.org/microcapital-brief-mastercard-foundation-of-canada-commits-additional-25m-to-brac’s-“microfinance-multiplied”-program-in-uganda-with-plans-to-open-40-new-branches/

MicroCapital’s Universe Profile: Mobile Telecommunications Network (MTN), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Mobile+Telecommunications+Network+%28MTN%29

Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/

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