You will not need to show alternative income or bank statement to access youth fund loans, the government has said in a statement posted on social media today.
Youth Enterprise Development Fund (Yedf) has waived this requirement following a major outcry that young people were not taking up the funds. In a statement posted on Facebook by Senior Director of Innovation, Digital and Diaspora Communication in the Office of the President Mr Denis Itumbi, Mr Itumbi told the youth to forget what happened in the past and try applying again.
The government funds meant to help the youth access the money for business ventures had been lying idle for years sparking uproar over strict requirements put in place to check against defaults.
Mr Itumbi corrected the statement on the presser which read that “the startups loans will be granted to youth with alternative verifiable income and a viable business plan,” saying that the rules have been changed and that alternative verifiable income is no-longer a requirement.
Review the collateral
YEDF Chief Executive Josiah Moriasi was in June quoted saying “we want to review the collateral conditions and applications procedures to attract more young entrepreneurs to benefit from the billions to grow their business.”
The loans are available to both individual borrowers and partnerships including limited companies. Individuals are allowed to borrow from Sh100k to Sh1m and the repayment period is between one year and 4 years.
The interest on the loan is 6 percent per year while the grace period is stated as 1 month. It is not clear whether the grace period was also considered for extension since most startup businesses do not start generating cash immediately.
Mr Itumbi also told the youth to seek the funds from their constituency offices in their respective locations however many of the youth voiced frustrations saying they have been turned down in the past over lack of income.
Fear of being auctioned
Fear of being auctioned over debt and stringent regulations at the Youth Enterprise Development Fund (YEDF) has kept the number of beneficiaries negligible since the launch of the fund more than 11 years ago, but officials says they are cutting out bureaucracy to boost uptake.
By June this years YEDF had given out Sh11,855,137,103 billion through its diverse loan products scheme, thus benefiting close to one million youth.
The fund had also promised to expedite the processing of the loan facilities to within 24 hours according to Mr Moriasi. It is not clear whether this challenge has been sorted since many have complained of the loans taking too long to be processed.
Kenyan youth are undergoing immense challenges due to lack of jobs even as the economy suffers difficult times as banks cut down on lending squeezing liquidity out of the economy. Most of the banks have reported a drop in earnings this quarter showing a slackening of their loan book.
In a rejoinder to the post some youths said they have been blacklisted by other lenders for as little as Sh5000 and hence they may not be allowed to borrow.
In another post today, youth who are talented in performing arts were targeted with interest free loans of between Sh100k to Sh2m while the service charge is 5 percent. Applicanst may be individuals, partnerships or companies. “Your talent is your security for loan,” Mr Itumbi wrote.