Uganda: Loans for Youth Empowerment Reduce Alcohol Use
A new study has found youth alcohol use has decreased in Uganda along with loans given to empower youth through the Youth Livelihood Programme (YLP).
The study was conducted by independent consultants from the University of California Los Angeles and Makerere University between 2017 and 2019. One district from each of the 15 regions were selected as the sample.
According to the report,
- the proportion of youth with businesses paying business taxes increased from 24.7% to 29%;
- it is better to provide loans to youth than cash handouts;
- the programme contributed to a 4% increase in job creation in Uganda;
- alcohol consumption among the youth decreased by 10%;
- formalization of businesses increased to 21.65% from 17.3%.
Uganda is grappling with the challenge of unemployment for its bulging youth population. Statistics from the Gender Ministry indicate that close to 65% of the total unemployed persons in Uganda are youth aged 18-30 years.
In addition, over 95% of the youth are considered “un-bankable”, seeing as they cannot access credit from formal financial institutions due to lack of collateral, verifiable credit history or steady employment.
Alcohol use is linked with poverty and unemployment and creates a vicious cycle which traps people, especially youth. Alcohol is an obstacle to sustainable development. By empowering youth to find a source of income through YLP, Uganda is breaking the cycle.
The results are observable as the proportion of youth owning bank accounts increased from 21% to 24.7%, thus enhancing their access to financial services such as savings, loans, business development advice as well as banking services. Further youth in the programme were able to increase their earnings, expand and diversify their enterprises.
The YLP in Government of Uganda programme launched in 2014 to support poor and unemployed youth aged 18 to 30 years. It is intended to create self-employment opportunities and enhance their incomes. Under the programme, youth groups access revolving funds of up to sh25m depending on the nature of the enterprise. This is to enable them to establish income-generating activities, acquire marketable vocational skills and tool kits.