Mercy Corps’ Youth Impact Labs Launches Emergency Interventions To Cushion Digital MSMEs And Workers Against Covid-19
Authored by: Josphine Kiruku — Communications Lead, Youth Impact Labs
Nairobi, Kenya, June 4th, 2020 — Mercy Corps’ Youth Impact Labs program, with the generous contribution from Google.org, announces extended support for digital Micro, Small and Medium Enterprises (MSMEs) and digital workers in East Africa to cushion them from the deleterious effects of COVID-19. Youth Impact Labs re-adjusted its program approach, to provide the much needed resilience-driven interventions for its tech innovators and beneficiaries.
Youth Impact Labs recognizes that the current circumstances present an unprecedented and extremely challenging business environment that has led to the grounding of business operations and loss of jobs for workers in certain segments of the digital economy. The program will, therefore, support its partners with working capital grants of up to USD 50,000 to curb the effects of the pandemic. Digital workers are often especially hard hit as they often lack income safety nets to shield them during times of crisis. As such, in addition to the working capital grants, Youth Impact Labs will commit USD 50,000 in cash transfers to support the programs’ digital workers who have been hardest hit. Realizing the detrimental effects of COVID-19 on employment and income generation, the decision to support the tech innovators and beneficiaries was inspired by the Youth Impact Labs’ mandate which is to, identify and test creative, technology-enabled solutions to tackle global youth unemployment.
Working capital support
According to the Kenya National Economic Survey 2019 report, the value of the ICT sector in Kenya, expanded by 12.9% from KES 345.6 billion in 2017 to KES 390.2 billion in 2018. This increase can be attributed to the continuous growth of the digital economy. Youth Impact Labs sees the digital economy as a potential solution to some of the challenges presented by COVID-19. Digital platforms in e-commerce and logistics are experiencing increased demand as more people shift to digital platforms to access basic products. The result of this, however, is limited supply and strained operational capacity, this is especially seen for these platforms that initially envisaged to serve a smaller market scope. Youth Impact Labs has identified some of its digital platform partners and will provide them with grants and technical assistance support to help in the following ways:
1. Provision of working capital to ensure consistent balance between demand & supply and adequately cover operational costs that relate to heightened safety measures including purchasing masks, sanitizers, and personal protective equipment.
2. With business operations stagnating or drastically slowing down, Youth Impact Labs is providing support to enhance the survival of these businesses during the pandemic and enable recovery, post COVID-19.
3. Provision of expertise and technical assistance to digital businesses to pivot their business models and operations. This will enable them to tap into opportunities and drive tangible solutions to the current crisis.
“Most innovations that have been piloted and commercialized under the Youth Impact Labs program have shown great resilience in the wake of COVID-19. Technology has proven to be an important tool in sustaining economic activity while ensuring that workers maintain the mandated social distance as they work” says Jerioth Mwaura, Project Lead, Youth Impact Labs. However, she also goes on to stress that even so “This economic crisis poses a risk of destroying the foundation that has been built by the program as the enterprises and workers remain exposed to the economic shock”
Cash transfer support
With movement restrictions, price increases, and reduced availability of temporary employment, households are experiencing an immediate impact on the ability to earn an income and access food. To counteract this, Mercy Corps will deliver cash transfers to stave off the worst effects of the pandemic. Based on Mercy Corps’ experience responding to the Ebola crisis in West Africa, people facing crises are often forced to take actions that undermine their future productivity, such as selling assets or taking on debt to pay for urgent needs. Such actions make it much harder to cope with a prolonged crisis or prepare for a post-crisis future. One key benefit of cash transfers is their flexibility: Households can meet basic needs while also protecting productive assets and capital.
“The devastating effects of a sudden loss of income can directly contribute to the spread of infection; where households are unable to access critical hygiene and sanitation products or adequate nutrient-dense food and other critical needs. Further, households will not be able to abide by physical social distancing measures, therein heightening the risk for the most vulnerable,” Jerioth highlighted.
“The program is implementing short term measures to mitigate the risk and support the program partners and beneficiaries. These measures will be blended with more long-term measures post the COVID-19 crises to assist the grantees to restart operations,” she added
About Mercy Corps Youth Impact Labs
Catalyzed by funding from Google.org, Mercy Corps’ Youth Impact Labs (YIL) identifies and tests creative, technology-enabled solutions to tackle global youth unemployment, accelerating job creation, so every young person has the opportunity for dignified, purposeful work. In Kenya, YIL focuses on digital marketplaces and platforms that offer services to micro and small businesses; agricultural supply chain management; and digital work.
The program supports these enterprises through financial and technical support, issued in the form of milestone-based grants. Through our post-investment support, on-boarded partners also get access to advisory services to support the development of technology solutions and tailored business support service to actualize scale.