Youth Business Russia

The Challenge

Alexei Schelgunov, mini-bakery

Gennady Shigapov, ProfEngineering

Anastasia Shvydkaya, children's footwear store

Mikhail Sazonov, travel agency

Olga Yurieva, perfumery shop

Anatoly Kostin, agribusiness, potato growing

Veronika Naumenko (right), drapery design and making

Denis Chernykh, wood carving

• By 2015 there will be 3 billion people in the world under 25
• Young people are 2-3 times more likely to be unemployed than adults and are not the target population for microfinance
• Over 80% of new jobs are created by small businesses
• Empirical evidence indicates that 20% of young people have the potential to become entrepreneurs, but less than 5% are able to

IBLF Involvement

The International Business Leaders Forum (IBLF) jointly with the Prince’s Trust, created an international network of programmes helping young people to start-up in business. This network was supported and developed by The Prince’s Youth Business International (YBI).

YBI is a network for 41 youth business programmes around the world. Each programme is adapted to reflect the local needs of the country it operates in. The YBI network has helped to set up over 97,000 successful new businesses, which in turn have provided employment to hundreds of thousands of people.

In Russia Youth Business Russia (YBR) is being run by IBLF Russia, the Royal Bank of Scotland and the British NGO Oxfam, with the assistance of YBI. The first pilot region in Russia is Kaluga where YBR has started giving out loans with the support of the “Women’s Microfinancial Network” (WMN). The second pilot region is Voronezh where YBR gives loans with the support of Voronezh Regional Fund for Small Business Support.

YBRfacilitates the development of entrepreneurship by young people, helps in the search of alternative methods of job creation, as well as integrates young people into the social and economic life of the region.

The programme allows young people to get low-interest loans for starting their own business. In addition to financial assistance they are offered help of mentors, consultancy and training in the various aspects of running a business. All this allows young entrepreneurs to get on their feet quicker and to avoid the usual mistakes of a start-up operation.

WHAT YBR BRINGS:

To young people:

• self-development
• economic independence
• creative liberty

To local authorities and society:

• job creation
• socio-economic involvement of youth
• unemployment reduction
• increase of wealth and prosperity
• development of a competitive landscape
• development of a small business sector

To business

• reputation enhancement
• establishing strong ties with the local communities
• strengthening employee motivation through involvement in socially significant projects

CREDIT TERMS

• young people aged 18-35 are eligible for loans;
• Up to 150 000 rubles (about $4300) is the credit limit;
• low interest – 12% per annum;
• the credit period – from 1 to 3 years with a possibility of a grace period of up to 3 months;
• no collateral;
• the basis for granting a loan is the applicant’s business-plan which is reviewed and approved by members of the Selection Panel.

Progress to date in Russia

All necessary documents and procedures have been worked out and approved and can be used in other regions, for example:

• documentation for lending;
• documentation on consultancy and training;
• documentation on mentoring;
• informative, educational materials;
• promotional material.

Results in the pilot regions (as of 7th of July 2010)

Kaluga region:

• 30 business projects have been approved;
• altogether 4 220 000 rubles (about $140 000) have been lent out;
• participants of YBR have created 123 new jobs;
• 62 dependants were supported.

Voronezh region:

• 29 business projects have been approved;
• altogether 4 196 000 rubles (about $140 000) have been lent out;
• participants of YBR have created 84 new jobs;
• 46 dependants were supported.

Events

May 28, 2010. Presentations of Results of the 2nd year of YBR in Kaluga Region
May 27, 2010. Presentations of Results of the 1st year of YBR in Voronezh Region
October 20, 2010. Presentation of YBR with participation of HRH Prince Michael of Kent
May 22, 2009. The first results of the Youth Business Russia programme in Kaluga were presented to the general public
May 21, 2009. Youth Business Russia programme was officially launched in Voronezh region

«I am delighted that I have joined “Youth Business Russia”. This programme has helped me to achieve a definite purpose and I am very grateful to all those people who have created it».

Anastasia SHVIDKAYA, 24 years old. Store of kids shoes «Twinkletoes»

Contacts: Boris Tkachenko, IBLF Russia Branch Director, Manager of YBR Programme. Boris.Tkachenko@iblf.ru