, NAIROBI, Kenya, Nov 9 – The Youth Enterprise Development Fund is developing a product that will enable it to lend money directly to young people in marginalised areas in the country.
Youth Affairs Minister Paul Otuoma disclosed on Wednesday that this was among a raft of strategies that the Fund wants to adopt to reach out to more young people and help entrench the entrepreneurial culture.
“Some of the interventions include the introduction of sector-specific financing to help address regional diversity as well as sectors traditionally not addressed such as film making and the music industry where many youth have shown great potential,” said the minister.
While releasing the Fund’s status report as at September 30, 2011 Otuoma said measures such as providing guarantees to financial institutions in order to facilitate easier access to credit under a risk sharing arrangement, were also on the radar.
The Youth Fund was established five years ago as an answer to the growing unemployment in the country.
However, its implementation was not without challenges primarily because there were no structures to govern how the money would be disbursed to youth at the grassroots.
Despite these initial hiccups, some achievements have been made, including the disbursement of Sh5.2 billion worth of loans to 144,000 youth groups across the country.
“Out of this amount Sh545.3 million has been advanced to 12,407 group projects while Sh54.2 million has been disbursed to 2,111 individual enterprises at the constituency level,” the Minister stated.
Through the financial institutions that partner with the government to advance the funds, a further Sh4.6 billion has been extended to 129,385 enterprises.
While reiterating that the revolving kitty is gradually achieving its mandate of addressing the challenges faced by youth in business, Otuoma disclosed that some 300,000 jobs have been created so far.
And in realisation that more can still be done, the government pledged to intensify training to enable the start-up businesses as well as the Small and Medium firms to survive.
This capacity building is particularly crucial at a time when the operating environment is harsh; characterised by soaring inflation and rising interest rates.
The Fund’s Chief Executive Officer Juma Mwatata reiterated the government’s intention to continue cushioning such businesses by ensuring that they access money from the kitty at competitive interest rates.
The government plans to maintain the rate at which loans are advanced to the youth at eight percent per annum in order to encourage more youth to take up credit.
This reassurance came even as it emerged that there are some regions such as North Eastern, parts of Rift Valley and Coast Province where loan uptake is still low.
Nairobi County however continues to lead with the number of groups taking up the loans standing at 508 and the amount disbursed at Sh22.3 million during the period under review.