Explainer: How to apply for Youth Enterprise Fund
Explainers
By
Esther Nyambura
| Apr 26, 2024
Most countries around the world have banked on Small and Medium enterprises (SMEs) to engineer their growth.
This is because SMEs account for almost 95 per cent of firms in the countries hence creating jobs, aiding industrial development, innovating and supporting large firms with inputs and services among other advantages.
In 2014, 80 per cent of jobs created were dominated by SMEs with an annual turnover of Sh500,000, with the numbers growing since then.
Despite that, these enterprises face several challenges, hindering them from operating at their optimum level.
One of the main challenges is finances.
A statement by the Kenya Agribusiness and Agroindustry Alliance noted that many Small and Medium enterprises do not have access to finance and credit, especially from financial institutions such as commercial banks.
This is because they can not meet the lending conditions given to them such as collateral for the loan.
The Kenyan government has resulted in the creation of various funds through various ministries in support of different groups operating SMEs in the country.
Among the available funds include the Hustler Fund and the Youth Fund, which has been operational for years.
However, according to Youth Enterprise Fund chairperson Fatma Barayan, the fund has not been popularised enough among the youth despite billions of money channeled to it.
According to Barayan, the Youth Enterprise Development Fund aims to financially support youths operating enterprises across the country.
How to apply
The fund is available to youth between the ages of 18 to 34 and can be accessed as an individual or as a group.
"The age limit is 18-34 but if you are above that and you are in a group, as long as 70 per cent of the leadership are youths, then you can benefit from it," said Barayan, while appearing on Spice FM on Wednesday, April 24.
Once an individual has registered, they are expected to submit their bank details including statements and items or details of things that will act as security for the loans.
Officers from the fund will then engage with the community including chiefs and church leaders to ensure that the debtors are members of the community and the businesses they aim to start are legible.
If satisfied with its finding, the fund disburses the money and one will be required to pay back with an eight (8) per cent interest.
According to Barayan, the Youth Fund lends a minimum of Sh100,000 and a maximum of 20 million depending on the nature of the job.
However, in some instances, one can access a starting loan of up to two million with the same interest rates.
"Depending on the records, one's starting loan can be Sh300,000. In the creative industry, for instance, we tend to give them loans of Sh2 million and above because of the cost of equipment and production which are usually costly. So a group like that one, Sh100,000 would not be very helpful," she said.
Every year, over Sh15 billion is disbursed to the Youth Enterprise Fund to support youth in enterprises.