A new assessment of youth-led businesses in Ethiopia finds that many are generating income and repaying loans, even as inflation, infrastructure challenges, social unrest, and limited access to markets threaten their long-term sustainability.
The evaluation comes as part of the Community Service as a Pathway to Work program, implemented by the Johns Hopkins Center for Communication Programs and the Youth Network for Sustainable Development in Ethiopia.
In partnership with the Mastercard Foundation, the five-year initiative aims to connect 500,000 young people with community service placements and provide training and facilitate access to loans and work opportunities to 200,000 of them.
As of July 2025, 245 microenterprises had been established in the country through the program from poultry and cattle farming to collecting and reselling used water bottles to setting up a photocopy shop. A qualitative assessment of 23 enterprises in Amhara produced by CCP offers a closer look at how those businesses are faring.
“What we are seeing so far is strong motivation and resilience from the youth we have worked with,” said CCP’s Abebe Shiferaw, the Amhara regional manager for the project. “The early signs suggest progress but sustaining and scaling these enterprises, participants tell us, will require ongoing financial flexibility, workspace solutions, and deeper market integration.”
Ethiopia has a very young population, with the median age of 19.3 years in 2026. Roughly 40 percent of the population is under 15 years old, while less than 4 percent are over 65. This means that Ethiopia’s high unemployment rate hits young people particularly hard.
In urban areas, unemployment rates for young people are as high as 20 percent; rural areas are only slightly better, although a much larger proportion is underemployed. Participants spoke of unemployment and the desire for financial independence as key motivations for starting their businesses.
“We were motivated by a strong desire to enter the business world. Initially, we couldn’t begin due to financial limitations,” said one of those running a new business. “But when we found this opportunity, we partnered and launched the business.”
Nesriya Mohammed graduated with a degree in accounting. “I applied for jobs everywhere I could,” she says.” “They said they would get back to me, but no one did.”
A friend suggested the Community Service as a Pathway to Work training, where not only was she able to do volunteer work, but she was taught how to develop a business plan. She saw a need for people to obtain photocopies and to have documents typed, “but there are only a few shops who provide the service.
“I realized I could reduce the time people wait for photocopies and this would be a profitable business.”
Now, she not only has a steady income, but has four other employees working for her.
Beyond income, many reported increased confidence, stronger communication skills, and a shift in mindset, from job seekers in a country without enough jobs to business owners.
Senayet Jemberu graduated with a degree in architecture in 2024. Instead of getting a job, she stayed home to help her sick father, but then her mother could no longer work either. For three months, she did community service at a home for elderly people. At the same time, she decided to start a chicken farming business, learning about how to feed and vaccinate poultry while learning about loans and finance.
“I am happy with the progress I have made so far,” she says. “You can see the progress with your eyes. Not only for me, but others who are working with me.”
Clients of these new businesses generally respond positively, according to the assessment, citing product quality, affordability, and reliability. Family members are often supportive, sometimes helping secure loans or offering practical encouragement.
Still, the assessment makes it clear that these enterprises are operating in a demanding economic environment. Recommendations in the report include extending the loan amounts available to youth microenterprises and extending repayment periods to alleviate financial pressure.
“Price inflation is a major issue, and the cost of goods keeps rising,” one enterprise leader said.
Infrastructure constraints also affect operations. “The lack of water has made it difficult to work. The electricity also goes out often,” another participant said.
Limited access to permanent workspace and structured market linkages were recurring themes. Many enterprises rely primarily on word-of-mouth and local networks to attract customers.
The assessment also identifies inclusivity challenges. Pregnant women and women with childcare responsibilities, for example, face participation barriers. Displaced youth may lack identification or guarantors required to secure loans. Youth with disabilities encounter inaccessible workspaces.
“The findings indicate that while many participants are motivated by a desire for self-reliance and improved livelihoods, they encounter numerous barriers that hinder their growth and sustainability. Increasing loan access and flexibility, providing workspace, tailoring training, mentoring, strengthening market linkages, and addressing barriers to inclusivity are recommended,” the report concludes.
Across interviews and focus groups, entrepreneurs emphasized the value of continued mentorship, targeted business training, strengthened market connections, and financing models that reflect current economic conditions.
Early signs of loan repayment and steady sales suggest that these youth-led enterprises are gaining traction. Participants expressed ambitions to grow in the next two to five years — expanding branches, increasing production, and creating more jobs.
“What some of these enterprises have accomplished already is inspiring,” Abebe says. “Our goal is to sustain their progress and help more young people find dignified and fulfilling work opportunities.”
