Graduates to get access to start-up capital under new programme

Thousands of Kenyan youths graduate from universities every year, but only a handful are absorbed into the job market.

The grim reality is that many youths remain unemployed despite their career path. This makes job creation through enterprise critical as white-collar jobs continue to shrink.

In an effort to address the lack of formal job opportunities for graduates, Acorn Holdings has introduced a programme aimed at equipping students with entrepreneurship training and pathways to start-up capital.

Under the programme, university students can now access unsecured housing loans that provide affordable accommodation and start-up capital.

The Zinduka Graduate Enterprise Programme is in partnership with ABSA Bank Kenya PLC and Co-operative Bank Group. It is designed to enable students to access affordable accommodation through unsecured housing loans and start-up capital.

In an effort to promote enterprise, the initiative will support between 5,000 and 10,000 new enterprises annually, with eligible graduates accessing business loans ranging from Sh200,000 to Sh500,000, empowering young entrepreneurs to start, grow, and sustain businesses while contributing to Kenya’s economic development and job creation.

The programme addresses the issue of access to quality and affordable accommodation.

In Kenya today, there are approximately 500,000 students enrolled in universities, but fewer than 40,000 university-provided beds, leaving 460,000 students in informal, unregulated makeshift accommodation that is unsafe, poorly serviced, and more expensive than it appears.

Further, upon graduation, students will have access to enterprise funds.

Only an estimated 15 per cent of graduates secure formal employment, leaving the majority to create their own livelihoods, often without business skills, a financial track record, or access to start-up capital.

“The formal job market is only able to absorb about one in ten graduates. This means the vast majority must create their own opportunities through entrepreneurship rather than rely on formal employment.”

"Zinduka bridges a critical gap by connecting a student’s journey from securing their first home away from home to accessing the capital needed to launch their first business,” said Edward Kirathe, Chief Executive Officer, Acorn Holdings Limited.

This is a pioneering model, a first of its kind in Kenya and arguably across the continent.

A student who completes four years of on-time payments graduates not only with a degree but also with a verified four-year credit history: a financial asset that most Kenyan graduates spend years attempting to build after the fact.

“Financial institutions find it difficult to lend to fresh graduates because they have no basis to assess their creditworthiness. Through Zinduka, students will be able to create a usable four-year credit record, making it easier to access funding for their businesses. The record will be backed by an Acorn-funded first-loss guarantee on their enterprise loan,” said Kirathe.

Rental payments of 4,000 shillings per month under the programme allow students to build a credit history. This record is designed to help meet Central Bank of Kenya-regulated lending criteria, as most graduates otherwise leave university without a credit score.

Speaking during the official launch of the Zinduka Graduate Enterprise Programme, Absa Bank Kenya CEO Abdi Mohamed said that students living in Qwetu and Qejani will be equipped with workplace readiness skills to prepare them for the world of work.

“More than 5,000 students are expected to benefit from tailored financing solutions, making quality student accommodation more accessible and affordable,” Abdi Mohamed said.

“With Sh1 billion committed to this initiative, Co-op Bank brings this vision to life and scales its impact for young people across the country,” said Joel Kaba, director, youth financial services at Co-op Bank.

Co-op Bank has designed and delivered a practical financing solution, anchored in a co-borrowing model in which students and parents jointly access funding, making the opportunity both accessible and sustainable.