By Eunice Kilonzo
Since its launch by President Mwai Kibaki in 2007, the Youth Enterprise Development Fund (YEDF) is yet to fully achieve its objectives. The fund was established to address the problem of youth unemployment. This would be achieved through investment opportunities in micro, small and medium enterprises which will be beneficial to youth empowerment and development. The fund which seeks to support youth growth is stalled by a number of reasons. According to Fred Kasina, the Economic Development Manager at the partnership for a HIV Free Generation, Kenya; few youths actually know about the fund. He was speaking at a recent youth training:
“Very few youths know and actually applied for the Youth Loan…there is a lot of money to start up businesses, youths fear loans”
Sharing his sentiments is Bernadette Mungai, who is the chief Manager at Kenya Institute of Management who says
“We have had several trainings to sensitize the youths about the economic opportunities available yet there is a low turnout when it comes to youths actually getting the loans”
To begin with most youths think that the money given by the Youth Fund is a grant and not a loan. This misconception is contributed by youth’s belief that the government promised to avail 500,000 jobs annually and this Youth Fund is put in place to achieve this aim.
Edwin Shomba a student at a local university when interviewed says
“I think it’s something like a grant you get from the government without having to repay it. I actually do not know where to go for assistance on the Youth fund”
Edwin like many other youths lack information about YEDF, its requirements as well as the necessary project/ business management skills.
An employee of the YEDF said that the institution offers loans to either individuals or a group. She said
“For a group to be funded, it needs to have a minimum of 10 members. The group presents its business proposal to the institution which is given a start-up boost of Kshs 50,000 at an interest rate of 5% payable within 12 months. Prior to the money being issued, the group goes through training on business management, book keeping as well as accounts management skills”
On the other hand if there are less than ten youths who have a business plan, say five, they can still apply for the Youth Fund. This can be achieved through a different Loan plan.
“An individual or a group of five youth should have been in business for at least three months prior the loan application. Depending on the business they can get their desired capital at a rate of 8% payable within 14 months provided they have their company’s registration certificate and other supporting documents. Both the individual as well as the group loan, there is a two month grace period after the expected repayment provided there is earlier notification to YEDF”.
Interestingly, one youth-James Waigwa, a third year student is still wary about taking the loan.
“I heard about YEDF a year ago, during the world cup period and I even attended a conference in KICC about the fund. However, am still in school and I can only run and maintain a business when on vacation, which rarely last three months. I had begun a video place where guys would come to watch the world cup matches but I could not sustain the business. I feared to take a loan from the Youth Fund for I did not know much about it, its interest rates and implications of defaulting payment, I am still not aware”
Edwin and James are among many other youths despite having great business ideas are yet to approach YEDF for economic empowerment. Most recently youths from Kilifi refused to acquire the loans for fear that the loans are politically motivated. In that one is given a loan in exchange for their votes in the upcoming general elections. YEDF however is on an awareness program to sensitize youths about the Youth Fund as well as dispelling myths on the same.