The government is in the process of transforming youth fund to a youth bank through pilot project of the Grameen model of banking, the youth fund Chief Executive Officer (CEO) Mwatata Juma Mwangala has disclosed.
The Kenyan government introduced the Youth Enterprise fund as a key tool to fighting youth unemployment 6 years ago, a rotating fund that has seen many youth form groups and benefit out of the fund through self initiated projects in different parts of the country.
Speaking in Kisii during a stockholder’s forum, the CEO said the government will select 8 counties for a start depending on the poverty index before spreading all over the country depending on the outcome.
Grameen bank is a microfinance and a community development bank which was started in Bangladesh to alleviate the poor and uplift the youth to transform themselves. It makes small loans to the impoverished without requiring collateral
He said the youth fund will be piloted in the next financial year by Grameen pilot projects which will be doing much of the work currently done by other financial institutions.
“It will be a big step because the banking institutions charge high rates to groups thus discouraging the youth from accessing the government funds to boost themselves,” Mwangala told InsideKenyaToday
He said his office is consulting widely so that it can meet the required conditions set by the central bank adding that they have carried out a lot of studies in countries that have succeeded in areas of financial banking such as Bangladesh.
He observed that by so doing the government will have transformed youth fund from just being a Parastatal to a youth bank which will finance not only short term but also long term finances to develop industries in each county. Mr. Mwangala called on local authorities to partner with the youth groups and give them land to develop facilities for business adding that at the moment the fund has partnered with Muranga, Meru and Mavoko local authorities.
He said in Kisii, a total of Ksh 100,000,000 million has been disbursed the Youth Enterprise Fund and Ksh. 19.5 million through the constituent loan since the programme started 5 years back.
The CEO disclosed that Ksh. 3.6 billion has been disbursed nationally saying his office is moving all over the country to involve stakeholders including the provincial administration and grass root leaders who will sensitize the youths on the funds.
He noted that through the stakeholders it will be easier to access the youths who are not informed on the projects the government is undertaking throughout the country.
The Kisii forum was the third nationally after Embu and Muranga. The CEO said learning institutions like colleges, village polytechnics and universities will be involved to reach the youths.
He called on youth officers to advise the groups on how to apply for loans and write proposals adding that the government is urging financial institutions to set conditions that are youth friendly to encourage more applications.
“Women can access the loans from youth and women funds and actually they are the best in repayment but a few have applied for the same,” he told InsideKenyaToday.
He however said that individual persons will not get access to the funds and called on those willing to be in groups and visit offices to be able to get the loans to enable them move forward.
Mr. Mwangala said in the next financial year, there will be in every county to bring the services closer to the youths noting that currently there is a shortage of offices countrywide making it a challenge in managing the funds.