Lack of business plans and formal loan applications is hindering young entrepreneurs from accessing financing. This comes in the wake of persistent complaints by young entrepreneurs in different parts of the country over lack of access to loans for their businesses.

That this hampers the growth of their businesses and the advancement of skills.

“Failure to follow the required process to access financing has played a major role in hindering the youth from accessing loans easily,” said Alexis Ntibaziyaremye, BDF Branch Manager Karongi.

Young business people used to complain that it was costly to hire private business advisers to help them with their applications, but today each district has a business development adviser to help formulate professional project plans.

“The decision to go to a private financial adviser requires financial literacy because you have to choose the right one, that’s why the government opted to bring them to the district to resolve this challenge,” said Mr Ntibaziyaremye.

The other challenge is the formulation of project and advisory services offered at the district level by business development advisers.

The cost of the services is 30 per cent of the total amount for the fully drafted project plan. If the project is worth Rwf10,000, the young entrepreneur pays Rw3,000.

However, the young business people say this cost is still too high for them.

Alphonse Nsengiyumva, 25, has a Bachelor’s degree in Agriculture and hopes to apply for an agribusiness loan but said the price of seeking advisory and project formulation is high.

“We appreciate the support offered by the government, but there are those who are still unable to pay for the advisory payments,” said Mr Nsengiyumva.

“Majority of the youths do not have enough information on the process of applying for the loan and services offered, which makes it impossible for them to access support from the Business Development Fund,” said Mr Ntibaziyaremye.

Despite efforts to support the youth in accessing finance, most of them don't understand the basic principles of finance and investing. Even the educated ones often have poor financial literacy,” added Mr Ntibaziyaremye.

There is a need for more education on financial literacy in the country.