According to a study by the African Coalition for Development And Environment, youth unemployment stands between 64% and 70%. Nearly 400,000 youths graduate from educational institutions to compete in the job market where they are only close to 9,000 available jobs.
Most graduates hence venture into entrepreneurship to create a livelihood through the acquisition of sponsorships, donations, or loans from parents.
Today on The Fatboy Show, while answering whether parents must loan their children money for their first startups, The Fatboy Show presenter Olive Najjuma agreed and said that parents should.
“I don’t believe it should be mandatory, but if your child has a good idea, talk about it. Ask them how they will run the business. Both the parent and child need to have conversations about the risk factors, and when you establish that they have a good idea of what they want to do, if you have the money, you can offer them a loan,” she said.
Olive opined that when a parent offers a loan instead of a handout, the child will feel responsible to have it returned other than when given to them without terms.
In his comment, Daniel Omara added that parents should also have a background check on their child’s financial discipline and management before they can loan them money to start a business.
“There has to be a bond of trust between the child and the parent, and a good reputation on they handle money. Secondly, there should be a viability analysis of whether the business model is sustainable, and the child has to pitch to their parent about how the business will operate and make profits,” he said.
The Fatboy show is hosted by James Onen aka Fatboy, Olive, and Sarah every weekday from 6 am to 10 am on RX Radio.