Youth Enterprise Grants (YEG) for the Informal Economy

The YEG pilot project provided approximately $1,200 in grants and a smartphone to over 1,000 youth (aged 18-35) in Mathare, Nairobi, to encourage business investment. Findings show a significant shift from casual labour to self-employment, with the proportion of self-employed recipients increasing from 37% to 79%. While smartphones were critical for market access and business operations via social media and M-PESA, the project noted high device attrition due to theft and loss. The study concludes that unconditional cash transfers via mobile money are highly feasible and effective for urban youth, though long-term success is often hindered by external shocks and a lack of basic services rather than a lack of business skills.

• The YEG project led to a substantial increase in entrepreneurship among participants, with the percentage of recipients identifying as self-employed rising from 37% at registration to 79% by the latest follow-up.
• Recipients invested approximately 34% of their grants into new or existing businesses, including agriculture. Those receiving lump sum payments invested a higher proportion, at 50%, which also included spending on education.
• Smartphones were essential for business growth, enabling youth to access clients, market goods, and obtain technical skills via social media and the internet, although only 53% of recipients retained the project phone by the endline survey due to theft, loss, and damage.
• Mobile money (M-PESA) was the most prevalent tool for managing and saving money. There was a strong demand for 'illiquidity' features that allow users to lock money away to prevent impulse spending, a need partially met by M-Shwari and informal saving groups.
• The provision of cash transfers did not increase insecurity or crime in the Mathare slum; instead, some evidence suggested crime decreased as youth focused on building livelihoods.
• The project found that the primary barriers to business success for urban micro-entrepreneurs are not typically financial literacy or business skills, but rather external shocks and the lack of reliable basic services, secure property rights, and healthcare.

APA

FSD Africa (n.d.). Youth Enterprise Grants (YEG) for the Informal Economy. https://fsdafrica.org/wp-content/uploads/2025/05/YEG-Brochure-29.10.21-1.pdf

Chicago

FSD Africa. Youth Enterprise Grants (YEG) for the Informal Economy. n.d. https://fsdafrica.org/wp-content/uploads/2025/05/YEG-Brochure-29.10.21-1.pdf.

Wikipedia

{{cite report |author=FSD Africa |title=Youth Enterprise Grants (YEG) for the Informal Economy |url=https://fsdafrica.org/wp-content/uploads/2025/05/YEG-Brochure-29.10.21-1.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{fsdafricandyouth, author = {{FSD Africa}}, title = {{Youth Enterprise Grants (YEG) for the Informal Economy}}, institution = {FSD Africa}, url = {https://fsdafrica.org/wp-content/uploads/2025/05/YEG-Brochure-29.10.21-1.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }