Youth fund enables young man to start poultry business
On 30 November 2016, a technical team from Mozambique's National Directorate of Youth and Sport visited some of the young people who benefited from the Fund Support for Youth Initiatives (FAIJ). Among the visited youth was Amândio Inácio, a 22 year old man living in Rapale district, Nampula province, and one of the Opportunities for Youth Employment (OYE) project participants.
Amândio is married and has one son. He participated in OYE's basic life skills and business training and after learning more about different businesses, he became interested in poultry rearing. Through the partnership between OYE and Novos Horizontes (NH), a poultry company, Amândio has been able to engage in an outgrower scheme and start his own poultry business. Outgrowers act as production agents for a larger company that provides inputs (such as young chicks and fodders) and buys the chicks back when they have grown. Through the partnership with OYE, Novos Horizontos also provides apprenticeships.
Before receiving the first chicks, an outgrower must provide a chicken pen that is evaluated by Novos Horizontos. The structure must have sufficient space, roofing and lighting (to keep the chicks warm) and must be equipped with drinking and feeding troughs. After passing this evaluation, the technicians determine the number of chicks the structure can accommodate. The poultry producer then signs an outgrower contract with Novos Horizontes, specifying the number of chicks and inputs required. After a month, Novos Horizontos buys the chickens and pays the outgrower based on the chicken's weight minus the costs for inputs.
Since Amândio had no capital to build his chicken pen, he decided to apply for a loan with the National Directorate of Youth and Sport's fund. SNV and Agro-Consultoria, a local service provider, supported him in preparing a business case for his loan application. Amândio's business plan was approved and he received a MZN 15,000 loan (about USD 250).
Amândio invested the loan in building his chicken pen and kept his first chickens for approximately five weeks. However, he ran into an unforeseen challenge. "After building my structure, I had no money left to buy the drinking and feeding troughs. I had to lease them at MZN 100 (USD 1.4) each, which is quite expensive (he needed at least 60 pairs of drinking and feeding troughs). I plan to pay for them after receiving my payment for the chickens.”
During an evaluation visit by the Department's fund staff, Fernando Dias, Head of the Department of Sports Policy, urged the team to increase the funding to match the needs of young people but emphasised that any loans must be repaid so the revolving fund can be retained. "It is necessary to guarantee repayment of the amounts disbursed in order to be able to finance other youth. Each time a loan is paid back we increase the value in the account and this helps to increase the amounts disbursed to improve the livelihoods of other youth", said Mr. Dias.
Eleven youth in Nampula Province have benefitted from the FAIJ fund. Amândio is one of three youth who invested his loan in the Novos Horizontes chicken outgrowing project.
The OYE project is funded by Mastercard Foundation. For more information about the project, please contact Elvine Binamungu, OYE Communication Coordinator, or OYE Project Manager, Roy van der Drift.