Youth Enterprise Grants (YEG) for the Informal Economy

The Youth Enterprise Grants (YEG) pilot project was a two-year intervention in Mathare, Nairobi, providing enterprise grants and smartphones to youth aged 18–35 to support their transition from casual labour to self-employment. The project demonstrated that unconditional cash transfers via mobile money are feasible in low-income urban settings and can significantly increase entrepreneurial activity, though the long-term success of micro-businesses remains vulnerable to external shocks and systemic infrastructure gaps.

• The YEG pilot project provided approximately $1,200 in grants and a smartphone to over 1,000 youth aged 18–35 in the Mathare settlement of Nairobi. Payments were delivered via M-PESA, with half the beneficiaries receiving three lump-sum payments and the other half receiving monthly payments of approximately $50 over two years.
• The project led to a significant increase in self-employment among recipients, with the proportion of youth describing themselves as self-employed rising from 37% to 79%. This shift was particularly pronounced among men, although women remained more likely to be self-employed overall.
• Recipients used the grants primarily for daily needs, education, or business investments, with approximately 34% of transfers invested in new or existing businesses. Lump sum recipients invested a higher proportion (50%) into productive activities, including education.
• Smartphones were critical for business growth, enabling youth to access market knowledge, technical skills, and clients via social media (Facebook and Instagram). However, the Touch Doh money management app had low adoption, with only 11% of recipients using it most days, as users preferred actual financial 'locking' mechanisms over digital advice.
• Mobile money remained the primary method for managing and saving funds, with a strong demand for 'illiquidity' features that allow users to lock money away to prevent impulse spending. M-PESA's M-Shwari and informal saving groups were popular for this purpose, especially among women.
• The project found that providing cash transfers in a high-crime area like Mathare did not increase insecurity, fraud, or violence; instead, some evidence suggested crime decreased as youth focused on their livelihoods.
• While the grants addressed capital barriers, the research indicated that business success for urban micro-entrepreneurs is more heavily constrained by external factors—such as reliable basic services, healthcare, property rights, and security—than by a lack of financial literacy or business skills.

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} }