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October 18, 2019

KENPRO (KENYA PROJECTS ORGANIZATION)

YOUTH ENTERPRISE DEVELOPMENT FUND

Youth Enterprise Development Fund (YEDF) is a state corporation under the ministry of public service and one of the vision 2030’s flagship projects under the social pillar. It was established in 2007 mainly to address challenges faced by youth unemployment with its main aim as turning youth into job creators. This article outlines the mandates, roles, and the products of Youth enterprise development fund in Kenya.

Mandate of YEDF

The youth enterprise development fund has mandates to provide loans and market support to youth owned enterprises, Facilitate youth owned enterprises to develop linkages with large enterprises, Provide entrepreneurship training and mentorship, provide trading premises and work sites to youth owned enterprises and coaching and Facilitate youth to obtain jobs abroad.

Application of YEDF

Application is done in the respective sub county/constituency headquarters. The application is by filling an application form attaching the required documents. The officer at the constituency level then guides the applicant through the necessary steps (vetting, training and the application process).

YEDF Loan Types and Requirements

Youth Enterprise Development fund offers the youth Group loans and individuals, companies and partnership loans as its products. There are sub-categories under each of these products.

GROUP LOANS

Group loans have no interests but a one off management fee of 5% charged on the time of disbursement. The loans are expected to be repaid into the corporation account that is provided to the youth group. Also the groups should provide:

  • Copy of certified valid group registration certificate and list of membership
  • Copies of IDs for ALL the members
  • A signed undertaking by the group to pay loans guaranteed to its members
  • Group minutes nominating/authorizing an applicant to a particular round of the loan
  • Duly completed YEDF loan application form
  • Group bank account details

YEDF Minimum Qualifications

  1. A group must possess a valid registration certificate from a relevant government body.
  2. A group has to have members that exceed 5.
  3. The group should have at least 70% of its members within the youth bracket (18 to 34 years) and 100% of the leaders should be youth.
  4. A group must have a joint bank account with at least 3 signatories. (Where the money will be deposited)

YEDF Loan Types

  1. Rausha loans: This is a start-up loan for either businesses or income generating activities. It has a three month grazing period after which repayment is made in 12 monthly instalments. The group can apply for cash 100,000
  2. Inua loans: Minimum of 200,000 and a maximum of 1,000,000. This category is meant for already existing businesses owned by youth. Groups that have already paid the Rausha loan can also apply for this loan. This category grows with the number of times a group applies for the loans.
  3. Special loans: This category is applicable by the youth groups that run projects that have generate income periodically or pre-determined irregular periods. It is available for projects like Agriculture, livestock raring, fish farming, poultry, supplies.
  4. Smart loans: This category is applicable to individuals in a group. When a group benefits from YEDF and pays the loan, the members of the group are allowed to apply for this category of loan for individual start-ups or expansion of businesses. For one to apply for this category, they have to have the following conditions:
  • Be recommended by 75% of the members of your group.
  • Minutes of the group meeting indicating that you are authorized by the group members to borrow.
  • A maximum of 80% of the group members shall borrow at the first instance. Subsequent funding to the next batch of members (20% of the members not previously financed) shall be after two instalments on the first loans have been paid.
  1. Swift loans: For groups that are new consumers of YEDF products can access this loan. For a group to qualify for this loan, the issue on security is involved:
  • The group members sign a guarantee to repay the loan in cases where a group member defaults.
  • An appropriate life insurance cover of the borrower shall be used to insure the loan
  • Items of the borrower for security and in cases where they do not own any, they can use parent`s or relative`s items
  • Attach registered chattel mortgage to the application on loans exceeding 100,000

LOANS FOR COMPANIES AND PARTNERSHIPS

  1. Vuka loan: Applicable for either start-ups or business expansion and for the purpose of acquiring assets that generate income. The following requirements are expected for one to apply:
  • In case of a partnership, 70% of the partners should be youth.
  • Borrower bears all costs e.g. security perfection, registration of charge/chattel, legal fee, valuation and insurance

Some of the products available for individuals include:

  1. Vuka start-ups: Secured by conventional security. The applicant must have verifiable business plan. Up to 500,000ksh
  2. Vuka expansion: Has a one off management fee of 1% deducted on disbursement and attracts interest of 6%. Has a one month grazing period. Minimum of 100,000 and maximum of 500,000. Loans of over 100,000 secured using conventional security while 100,000 by chattels, stock and business assets.
  3. Vuka Assets Financing: Loans of over 100,000 secured using conventional security while 100,000 by chattels, stock and business assets. In case of a motor vehicle, it should not have been in operation for more than 8 years and the motor vehicle is fitted with a tracking device and insured for security.

Other products include:

  1. Agri-biz loan: For agricultural related projects
  2. Trade Financing: For government supplies i.e. the LPO funding
  3. Talanta loans: For creative performance arts projects

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