Americas Quarterly - Winter 2011

Is to Create), draw on the strengths of earlier initiatives by offering a full package of services to young entrepreneurs. 11 Founded in 2001 and administered by the Asociación Pro Bienestar y Desarrollo (PROBIDE), it works in collaboration with the government, domestic companies, transnational corporations, international NGOs, and multilateral development organizations.

Creer para Crear receives hundreds of applications from small teams of entrepreneurs across Peru every year. Applicants—all under 30 years old—can submit proposals for a wide range of businesses, provided start-up costs don’t exceed $16,500. Mentors then help participants identify and quantify the need for financing and establish areas where assistance is needed. Training includes courses in accounting, financial management and sales.

Carlos Benavides, a young Cuzco-based entrepreneur, was an early beneficiary of the program. In 2003, he submitted an idea for a business that would market a line of organic instant soups made from Andean crops like choclo (a local strain of corn) and quinoa. He figured he could compete in local markets with soup products offered by big-name multinationals. But with no formal business experience, Carlos says, he couldn’t get banks to back him with start-up capital, even at then-prevail-ing interest rates of 30 percent.

Creer para Crear approved his business model, which involved launching a single corn-based instant soup line in his hometown, and he began receiving management training from the program mentors. Then Creer para Crear, acting as guarantor, secured a low-interest loan from a partner bank in Cuzco, and Inka Perú was born.

Sales were slow at first, says Benavides—“only a few hundred dollars in the first year.” But by 2009, the company expanded its offerings to include five distinct product lines including breakfast foods, snacks and soups—which it now also sells in Lima’s Totus and Metro supermarket chains. With $175,000 in sales in 2009, Benavides says, “there is still a ways to go, but the company has 16 employees now and when I need a loan, bankers no longer look at us like we’re not to be trusted.”

Creer para Crear sponsors include major transnational companies like Nestlé, Nextel and Pizza Hut, and domestic businesses like Wong supermarkets. The organization works in collaboration with Corporación Andina de Fo-

“NOW, WHEN WE NEED A LOAN,
BANKERS NO LONGER
LOOK AT US LIKE WE’RE NOT
TO BE TRUSTED.”

PROJoven’s Arriola. Some companies are regular employers of PROJoven students. The Lima-based textile company TEX TIMAX-IN TI TEX, for instance, has employed 300 PROJoven students to date.

A 2004 assessment of PROJoven by the Inter-American Development Bank (IDB) found that graduates experienced a 52. 1 percent increase in average monthly earnings within months of completing the program. 8 Another 2006 IDB study concluded that there were positive effects in terms of paid jobs and formal employment probabilities, and a high positive impact in terms of earnings. 9

According to Arriola, youth employment is an institutional priority for the Peruvian government. He claims PROJoven’s success demonstrates that such programs can be effective. Peru’s MTPE has already renewed funding for 2011 and introduced plans to train 100,000 more young people by 2013.

TRAINING TOMORROW’S ENTREPRENEURS

Helping young people harness their skills and in- novative capacity doesn’t just create new jobs for them. It can develop the kind of entrepre- neurship that creates jobs for their peers. The Programa de Calificación de Jóvenes Creadores de Microem-presas is a leading example of what can be done. Rather than just providing managerial training, it combined classroom training, counseling and follow-up services, internships, and access to credit.

First launched by the Peruvian NGO Colectivo Integral de Desarrollo in 1999, the program not only increased the likelihood that start-ups would stay in business after their first year but led to the creation of new jobs. According to one assessment, program graduates employed 17. 3 percent more workers than a control group of independent entrepreneurs working outside the program. 10