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Report 2 (of 4): Commonwealth Youth
Credit Initiative - Guyana
Introduction
The Commonwealth Youth Programme (CYP) began over
twenty years ago and focused on enterprise training
programmes for youth workers. The scope of CYP has
since developed into a wide range of programmes and
activities which address the needs and concerns of
young men and women in the fifty three Commonwealth
Countries. It seeks to ensure that young men and
women are empowered by developing their potential,
creativity and skills.
The CYP services the Commonwealth Countries through
four regional centres with the Head Office at the
Commonwealth Secretariat in London. The Regional
Centres are located in Zambia, Africa; India, Asia;
Guyana, the Caribbean; and the Solomon Islands, South
Pacific.
Establishing micro enterprises is a difficult task
for many young men and women because they fail to
meet the basic eligibility critieria of the traditional
financial institutions. Many of these institutions
require the borrower to provide collateral in the
form of cash or some form of fixed asset, such as
land or property. Most of the world's youth do not
possess such collateral and are seen as high risk
borrowers with the expectation that they will default
on their loan repayments.
Commonwealth Youth Credit Initiative (CYCI)
The CYP has established the Commonwealth Youth Credit
Initiative (CYCI) to address the constraints and
remove the obstacles which inhibit young men and
women from developing micro enterprises. By relaxing
the credit constaint which is perceived to inhibit
youth enterprise development, youth unemployment
in Commonwealth developing countries can be reduced.
It is expected that CYCI will enable young men and
women to grow, develop and enhance their standard
of living through access to opportunities and resources
which were once beyond their reach.
Short Term Objectives of the CYCI
To improve business skills and attitudes among
the young entrepreneurs.
To enable young entrepreneurs to gain access to credit without collateral.
To encourage individual and group savings.
Long Term Objectives of the CYCI
To raise the social and economic standards of
living of young men and women in the CYCI project
areas.
To promote youth entrepreneurs to access credit from larger financial institutions.
To improve awareness amongst financial institutions about the credit worthiness
of young men and women.
To identify potential co-financiers for the replication and expansion of
the initiative.
Management Advisory Board
The Management Advisory Board (MAB) is responsible
for the financial and administrative management and
on-going monitoring and evaluation of the projects.
The board includes two youth representatives (ideally
participants in the scheme), the NGO project supervisor,
a CYP Regional Centre staff member, a representative
from the Ministry responsible for Youth Affairs in
the host country and a private sector representative
from the commercial bank providing the loan. The
MAB also offers support to the entrepreneurs and
several of its members act as mentors to the participants
and help them to develop their business plans.
Guyana
Guyana is located on the north eastern coast of
the continent of South America. As a country, it
has experienced a long period of economic stagnation
and decline. Recently conducted surveys indicate
that 78% of the population receive incomes below
the poverty line and that two-thirds of households
are unable to access one or more of the basic needs
for housing, water supply, sanitation and health
services. Coupled with these deprivations is the
high rate of unemployment among young people aged
between 15 and 24 years which exceeds 50%.
The Commonwealth Youth Credit Initiative (CYCI)
was launched in Guyana in 1996 with the main purpose
of reducing unemployment and underemployment amongst
the youth population. The catchment area chosen for
the pilot project which would run for a period of
three years, was the villages and communities between
Eccles, East Bank Demerara and Annandale, East Coast
Demerara. Each year in the project cycle thirty young
men and women would benefit from non collatoralised
loans.
In Guyana, the CYCI project is managed by the Commonwealth
Youth Programme: Caribbean Centre (CYP:CC) in collaboration
with Globe Trust and Investment Company Limited,
a financial institution, which has joined with the
CYP to deliver services to the youth of society and
manage the credit scheme.
Credit Scheme
The CYCI targets young men and women between the
ages of 18 and 30 years with a special attention
for the 18 to 24 age group. All young people regardless
of religion, race, political affiliation, socio-economic
status, HIV status or disability are eligible to
participate.
Components of CYCI
The CYCI provides:
Training in Personal Development and Small Business
Management Skills.
A savings scheme.
Credit without collateral.
Monitoring and support for successful enterprises.
Training The training programme is delivered
through distance learning, over a period of about
six months. The participants meet weekly to help
each other with their assignments and this allows
them to bond and get to know each other in preparation
for group cross-guarantee. The participants also
spend one week on attachment with an established
small business to gain some first hand practical
experience.
Personal Development Modules:
Self and the socialisation process
Families we come from and families we create
Values/beliefs/experiences and their impact on self
Effective communication
v Goal setting
Styles and qualities of leadership
Decision making
Cooperation and consensus building
Conflict resolution
Gender and its implications for personal and business development
Small Business Management Programme:
Getting ready for business
Costing the business
Identifying a market
Marketing products and services
Book-keeping
The Business Plan
Managing the business
On completion of the training programme, participants
are expected to complete a business plan demonstrating
that their proposed business is sustainable. It is
submitted to the partner organisation, Globe Trust
and Investment Company Limited, for appraisal and,
after review, access to funds may be granted.
Savings Scheme
While undergoing training, participants are required
to save regularly as individuals and on a group basis.
This instills the discipline required for capital
accumulation and for the repayment of loans.
Loans
Since the young people do not have to get collateral
to access loans, the CYCI has implemented a group
structure. Participants are placed into groups of
five and they are all responsible for ensuring that
each member of the group repays their loan on time.
Therefore, each member of the group cross-guarantee
one another and use peer pressure to ensure repayment
of the loans.
The maximum loan for the establishment of each enterprise
is US$1,000 although the initial loan is likely to
be between US$50-100. The loans must be large enough
to be of effective use to the borrower, but small
enough for repayments to be made within the intended
time schedule. They are repaid at the prime bank
rate of 17% per annum.
The pattern of loan delivery is 2:2:1. Two borrowers
in the group of five are given their loans and monitored
for five weeks. If repayment is prompt, another two
borrowers will receive their loans, and following
the repayment of these after five weeks, the last
borrower will receive a loan.
In the case of defaults, repayments will be taken
from the savings accumulated both in the group fund
and on an individual basis.
For further information, please contact:
CYP Caribbean Centre, PO Box 101063, Georgetown,
GUYANA. Tel: +592 2 68565 Fax: +592 2 68371 E-mail:
cyp-car@solutions2000.net
CYP South Pacific Centre, PO Box 1681, Honiara,
SOLOMON ISLANDS. Tel: +677 39229 Fax: +677 39230
E-mail: cyp@welkam.solomon.com.sb
CYP Africa Centre, PO Box 30190, Lusaka, ZAMBIA.
Tel: +260 1 252733 Fax: +260 1 253698 E-mail: cypac@zamnet.zm
CYP Asia Centre, PO Box 78, Chandigarh, INDIA Tel:
+91 172 541482 Fax: +91 172 545426 E-mail: cypasia.chd@rmm.sprintrpg.ems.vsnl
CYP Pan-Commonwealth Office & Headquarters,
Gender and Youth Affairs Division, Commonweath Secretariat,
Marlborough House, Pall Mall, London. SW1 5HX. ENGLAND.
Tel: +44 (0) 171 839 3411 Fax: +44 (0) 171 747 6549
E-mail: CYP@commonwealth.int
Intermediate Technology would like to thank the
Commonwealth Youth Programme for providing all
the original material on the Commonwealth Youth
Credit Initiative.
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