Potentials for youth entrepreneurship in Dar es Salaam A research conducted by the UpToYouToo foundation and the Tanzania Youth Coalition 2008-2009

Reseacher: Sophie Besnard (UpToYouToo/Masters International Development Studies) - Academic relevance - Practical relevance Supervisor: Nicky Pouw (ISHSS) Local Supervisor: Humphrey Polepole (TYC) Reseach assistants: Adrian Nzamba Juma Mkuu Mariam Kamtande Mark Okello Vitalis Mwakasege (TYC)

Reseach assistants:

Adrian Nzamba

Juma Mkuu

Mariam Kamtande

Mark Okello

Vitalis Mwakasege (TYC)

Research Question What are the potentials for poor urban youth in Dar es Salaam to be engaged in self-employment entrepreneurial activities?

What are the potentials for poor urban youth in Dar es Salaam to be engaged in self-employment entrepreneurial activities?

Perceptions on Potentials for Entrepreneurship Opportunity Context Mentality Entrepreneurial Capacities Youth Entrepreneur Comparison of Perceptions Local Community Context Bureaucracy Context Micro – Financing Context External Stake-holders Local Community Local Government Central Government MFI’s SACCOS’s NGO’s CBO’s Youth Centres Governmental Institutions Family Personal Demographic Variables Labour Background Official Status Perceptions on Potentials for Entrepreneurship External Entrepreneurial Environment Education Networks Perceptions on Potentials for Entrepreneurship

Research Methods Literature Review Policy Analysis 90 surveys with youth 30 in-depth interviews with youth 16 in-depth interviews with stake-holders SPSS

Literature Review

Policy Analysis

90 surveys with youth

30 in-depth interviews with youth

16 in-depth interviews with stake-holders

SPSS

Stake-holders: The bureaucracy context: Assistant Director responsible for Training and Skills Development for Youth at theMinistry of Labour, Employment and Youth Development Youth Development Officer of Kinondoni District Youth Development Officer of Temeke District Youth Major of Kinondoni The micro-financing sector context: Volunteer at SELFINA Cashier of the WAT SACCOS Director of the Vision SACCOS Secretary General of Kisarawe SACCOS Local District Cooperative Officer at Temeke District The opportunity context TYC Coordinator of Open Mind Tanzania Volunteer at SAGETA Chairperson of VIBINDO Societ Chairman Youth Development Network Manager of Extension Services and Training at the head quarters of SIDO

Stake-holders:

The bureaucracy context:

Assistant Director responsible for Training and Skills Development for Youth at theMinistry of Labour, Employment and Youth Development

Youth Development Officer of Kinondoni District

Youth Development Officer of Temeke District

Youth Major of Kinondoni

The micro-financing sector context:

Volunteer at SELFINA

Cashier of the WAT SACCOS

Director of the Vision SACCOS

Secretary General of Kisarawe SACCOS

Local District Cooperative Officer at Temeke District

The opportunity context

TYC

Coordinator of Open Mind Tanzania

Volunteer at SAGETA

Chairperson of VIBINDO Societ

Chairman Youth Development Network

Manager of Extension Services and Training at the head quarters of SIDO

Findings

1. Youth Characteristics

Businesses [1] Here there are more businesses mentioned than 100 90 Total 4.4 4 No information 3.3 3 Other 1.1 1 Entertainment 2.2 2 Several businesses 2.2 2 Shoe shining 5.6 5 Hairdressing/salon/cosmetics 2.2 2 Tailoring 6.7 6 Selling other wares 2.2 2 Selling cultural stuff 13.3 12 Clothes 2.2 2 Groceries 11.1 10 Other food 5.6 5 Selling prepared food/drinks 4.4 4 Selling fruit and vegetables 33.3 30 no business Percentage Number of respondents Kind of business

Networks 100 90 Total 4.4 4 SACCOS and youth group 1.1 1 SACCOS 0 0 MFI 0 0 CBO 0 0 NGO 10.0 9 Youth club/camp 5.6 5 Youth group 77.8 70 None Percentage Number of Respondents Institutions

2. Youth Mentality Positive self-image e.g. 83.3% said to be independent 94.4% wanted to be an entrepreneur But: Often no entrepreneurial mentality e.g. only 52.2% dared to take risks 95.6% said the environment is determing in the success However, they were often not positive about their environment Status seemed to be one of the most important motives to engage in entrepreneurhip: 93.3% said that being an entrepreneur is something to be proud of 82.2% said that entrepreneuship gives status

Positive self-image

e.g. 83.3% said to be independent

94.4% wanted to be an entrepreneur

But: Often no entrepreneurial mentality

e.g. only 52.2% dared to take risks

95.6% said the environment is determing in the success

However, they were often not positive about their environment

Status seemed to be one of the most important motives to engage in entrepreneurhip:

93.3% said that being an entrepreneur is something to be proud of

82.2% said that entrepreneuship gives status

„ For an emerging entrepreneur, at least parts of the surrounding milieu must be supportive of his or her struggling for independence, creativity, and profit making. At least some persons or institutions should be motivating the individual‟s search for new ideas and higher income. The endorsing milieu might be an ethnic network, relatives and friends, a neighbourhood, or an institution…‟ (Stein Kristiansen 2002: 5)

„ For an emerging entrepreneur, at least parts of the surrounding milieu must be supportive of his or her struggling for independence, creativity, and profit making. At least some persons or institutions should be motivating the individual‟s search for new ideas and higher income. The endorsing milieu might be an ethnic network, relatives and friends, a neighbourhood, or an institution…‟ (Stein Kristiansen 2002: 5)

3. Local Community Context

Many respondents learned livelihood skills from their family However, they often do not have entrepreneurial skills Copycat entrepreneurship  no innovation 71.1% valued role local community in their choices Only 56.6% feels supported 71.1% felt supported by their parents Only 33.7% feels financially supported Word of mouth influences youths’ opinions

Many respondents learned livelihood skills from their family

However, they often do not have entrepreneurial skills

Copycat entrepreneurship  no innovation

71.1% valued role local community in their choices

Only 56.6% feels supported

71.1% felt supported by their parents

Only 33.7% feels financially supported

Word of mouth influences youths’ opinions

4. Bureaucracy Context

Table 7. The local government supports small scale entrepreneurs Table 8. The central government supports small scale entrepreneurs 100 31.1 31.1 37.8 Percentage 90 28 28 34 Nr. of Respon- dents Total Agree Not sure Disagree 100 33.3 35.6 31.1 Percentage 90 30 32 28 Nr.of Respon- dents Total Agree Not sure Disagree

Table 9. The local government helps youth to set up an enterprise Table 10. The central government helps youth to set up an enterprise 100 31.1 31.1 37.8 Percentage 90 28 28 34 Nr. of Respon-dents Total Agree Not sure Disagree 100 33.3 37.8 28.9 Percentage 90 30 34 26 Nr. of Respon-dents Total Agree Not sure Disagree

“ the government does not help us at all, even the village chairman does not help us” Lack of knowledge Only 27.8% had heard of Youth Development Funds Generally more negative about government Difficult to formalize Difficult to pay tax They generally preferred to be formal More negative about local than central government e.g. city cleaning operations

Lack of knowledge

Only 27.8% had heard of Youth Development Funds

Generally more negative about government

Difficult to formalize

Difficult to pay tax

They generally preferred to be formal

More negative about local than central government

e.g. city cleaning operations

Stake-holders’ views Lack of education VETA & SIDO Lack of finance Youth Development Funds (through SACCOS) Lack of (proper) business premises Lack of communication at government level Often no Youth Development Officers Mentality youth Not looking for information Not serious enough Not always trustworthy

Lack of education

VETA & SIDO

Lack of finance

Youth Development Funds (through SACCOS)

Lack of (proper) business premises

Lack of communication at government level

Often no Youth Development Officers

Mentality youth

Not looking for information

Not serious enough

Not always trustworthy

5. Micro-Financing Context

Only few knew specific MFI’s No respondents had gone there They felt their business was too small They though they could not meet requirements They were afraid of reprimands Had negative opinions about financial intitutions Again: many were ignorant 5.5% was SACCOS member They were generally positive about SACCOS

Only few knew specific MFI’s

No respondents had gone there

They felt their business was too small

They though they could not meet requirements

They were afraid of reprimands

Had negative opinions about financial intitutions

Again: many were ignorant

5.5% was SACCOS member

They were generally positive about SACCOS

Stake-holders Views For MFI a challenge to target youth No colleteral Small loans more costly to process SACCOS and MFI should be combined with education on how to use loan Specific youth SACCOS are established Though they face problems at higher level An anti-institutional mentality stands youth in the way to access MFI’s Often based on word of mouth Little ‘real’entrepreneurship Necessity driven vs. Opportunity driven Little investments

For MFI a challenge to target youth

No colleteral

Small loans more costly to process

SACCOS and MFI should be combined with education on how to use loan

Specific youth SACCOS are established

Though they face problems at higher level

An anti-institutional mentality stands youth in the way to access MFI’s

Often based on word of mouth

Little ‘real’entrepreneurship

Necessity driven vs. Opportunity driven

Little investments

6. Opportunity Context

46.7% said to know where to gain entrepreneurial advice/ education They most often went to relatives/friends Only 43.3% knows NGO’s/CBO’s that could help them Lack of awareness Only 40.0% thinks NGO’s/CBO’s are approachable 60.0% said internet is important None had used it for business purposes A few had never even heard of internet Only 49.4% felt they had access to business premises 22.2% of the people that had a business said they did not have access to a conducive place

46.7% said to know where to gain entrepreneurial advice/ education

They most often went to relatives/friends

Only 43.3% knows NGO’s/CBO’s that could help them

Lack of awareness

Only 40.0% thinks NGO’s/CBO’s are approachable

60.0% said internet is important

None had used it for business purposes

A few had never even heard of internet

Only 49.4% felt they had access to business premises

22.2% of the people that had a business said they did not have access to a conducive place

Stake-holders’ Views Lack of education Livelihood skills in general Specifically entrepreneurship skills Lack of finance Lack to operate finance Lack of trust Lack of communication between stake-holders No network No knowledge More donor driven Mentality youth They do not keep records of business Lack of entrepreneurial mentality However: a believe that youth can change their mindsets and can be succesfull entrepreneurs lived.

Lack of education

Livelihood skills in general

Specifically entrepreneurship skills

Lack of finance

Lack to operate finance

Lack of trust

Lack of communication between stake-holders

No network

No knowledge

More donor driven

Mentality youth

They do not keep records of business

Lack of entrepreneurial mentality

However: a believe that youth can change their mindsets and can be succesfull entrepreneurs lived.

Recommendations

1.Integrate youth policies into national and sectoral policies 2. Employ Youth Development Officers (YDO’s) 3. Change formal curriculum and improve vocational training 4. Supply sufficient information on registration procedures 5. Simplify registration procedures 6. Improve existing image 7. Supply Youth Development Fund through youth SACCOS 8. Supply premises 9. Improve use of internet amongst population Recommendations to the government of Tanzania

1.Integrate youth policies into national and sectoral policies

2. Employ Youth Development Officers (YDO’s)

3. Change formal curriculum and improve vocational training

4. Supply sufficient information on registration procedures

5. Simplify registration procedures

6. Improve existing image

7. Supply Youth Development Fund through youth SACCOS

8. Supply premises

9. Improve use of internet amongst population

Recommendations to Stake-holders in the Micro-financing context Micro Finance Institutions: Create low-treshold policy for youth Assist and educate youth Supply loans to youth SACCOS Saving and Credit Cooperative Societies 1. Form alliance and lobby

Micro Finance Institutions:

Create low-treshold policy for youth

Assist and educate youth

Supply loans to youth SACCOS

Saving and Credit Cooperative Societies

1. Form alliance and lobby

Recommendations to Stake-holders in the Opportunity Context Create a network to service providers Stick to missions, visions and goals Report to the local authorities Change youth mentality Provide youth with information Assist youth 7. Create role models 8. Use radio and television to reach youth 9. Lobby

Create a network to service providers

Stick to missions, visions and goals

Report to the local authorities

Change youth mentality

Provide youth with information

Assist youth

7. Create role models

8. Use radio and television to reach youth

9. Lobby

Questions and remarks?

Combining Academic Research with working for/with a NGO Gains Adding a practical dimension Relevance Help and expertise in the field Working together with the NGO in the future Give follow up on findings Challenges Tension between two goals Independence as a researcher Being an researcher vs. NGO-worker How honest/critical can you be? State-funded Contacts via NGO Ethical challenges Staying Academic

Gains

Adding a practical dimension

Relevance

Help and expertise in the field

Working together with the NGO in the future

Give follow up on findings

Challenges

Tension between two goals

Independence as a researcher

Being an researcher vs. NGO-worker

How honest/critical can you be?

State-funded

Contacts via NGO

Ethical challenges

Staying Academic