6 Loans Offered By Youth Enterprise Development Fund

This article is about loans offered by the Youth Enterprise Development Fund. The Youth Entrepreneurship Development Fund is a state body under the Ministry of ICT, Innovation and Youth Affairs. It is one of the emblematic projects of Vision 2030 that falls under the social pillar. It aims to create job opportunities for young people through entrepreneurship. The fund provides easy and affordable financial and business development support services to young people interested in starting or expanding businesses.

Loans Offered By Youth Enterprise Development Fund

LPO/LSO offering and bond financing

The Youth Enterprise Development Fund provides financing for tenders and local purchase orders/local service orders to young people participating in government tenders, under the AGPO program and other non-owned contracting entities of the government.

Loans can be accessed as follows;

Local purchase order (LPO) financing.

The loan is available to individuals, registered groups, associations and businesses run and managed by young people. Young people can access up to 5 million Kenyan shillings.
The fund will finance 70% of the LPO amount. The loan accrues interest of 1.5% after 90 days.
A fee of 6.5% of the amount borrowed will be charged. The financing will be guaranteed by a letter of commitment, bank guarantees and conventional guarantee.

Requirements

• Be registered with the corresponding government agency.
• A valid LPO issued by a qualified agency.
• Commitment of the contracting authority to pay the proceeds of the tender to the Youth Business Development Fund Council.
• Customer account details.

Agricultural loan

The loan is available to young people who wish to start or expand an agriculture-related business. It is available to individuals, registered groups, associations and businesses run and managed by young people. Young people can access up to 2 million Kenyan shillings. The loan is interest-free, but a management fee equal to 5% of the loan amount will be deducted at the time of disbursement.

The loan repayment period is three years. Loans of up to Ksh300,000 will be fully secured by conventional securities.

Requirements

Applicants must obtain supplies or equipment from reputable vendors and provide invoices or estimates for the same. You must have the relevant licenses and provide copies.
You must have a valid supply contract, where applicable, and provide copies. You need to have a proposal to start an agricultural business.
You must provide relevant business documents, including the sales contract. Provide certified bank statements for 6 months.
Provide proof of ownership of the land on which the agricultural activity will be carried out or lease agreements for rented land or owner’s consent for the use of the land. You must have 2 guarantors, one must be working in the sector. Otherwise, the applicant will have to provide a conventional guarantee. Startup candidates must be organized into groups, or must have alternative incomes or conventional values.

Vuka loan

The loan is available to young people who wish to start or expand a business. Applicants can use the loan as working capital or to purchase income-generating assets.

Vuka launch

It is advanced for young people with verifiable alternative income and a business plan.
Youth can access up to Kshs 500,000
The loan is entirely backed by conventional real guarantees.

Vuka expansion loan

The loan varies between Ksh 100,000 and Ksh 5,000,000.
Earn 6% interest and a one-time 1% processing fee deducted from your loan at disbursement.
The grace period is one month.
The Sh100,000 loan will be secured by movable assets, shares and business assets.

Loans above Sh100,000 will be secured by conventional collateral.

Vuka asset financing

The fund will finance 70% of the value of the goods/equipment purchased. Further guarantees will be provided in addition to the financed asset.
Loans worth Sh100,000 will be secured by movable property, shares, business assets or collateral.

Loans above Sh100,000 will require conventional collateral.
In the case of motor vehicles, the fund will finance up to 90% of the value of the vehicles purchased and these must be new. Used motor vehicles must not be more than 8 years old. The financed vehicle will be equipped with a tracking device and fully insured.

Repayment period

Amount. Repayment period

Up to Ksh 100,000 2 years

Up to Ksh 300,000 3 years

Up to Ksh 500,000 4 years

Up to Ksh 1,000,000 5 years

Over 1,000,000. 6 years

Requirements

In the case of companies, 70% of members must be between 18 and 34 years old.
The borrower will bear all costs such as insurance, collateral perfection, survey, registration of charges/movable property and legal fees.

Constituency-based loans

The loan aims to help people start income-generating activities at the constituency level.

Constituency based loans include;

Rausha

The Rausha loan is for groups and individuals and is up to Ksh 100,000. It has a grace period of 3 months, with repayment made in 12 equal monthly installments.

Inua

It is a business expansion loan for groups. It is advanced for groups with running businesses. Groups that have fully repaid Rausha or loans from other institutions can apply for Inua loans.

The loan amount starts from Ksh 200,000 and groups can progressively graduate up to Ksh 1,000,000.

Inua’s first loan has a grace period of one month. There are no grace periods for subsequent loans.

Loans up to Ksh 500,000 will be secured by movable assets, while loans above Ksh 500,000 will require conventional collateral.

Special

It is only available to groups running entrepreneurial projects that generate money in predetermined periodic or irregular periods. It will be available for agricultural production, livestock trading, fish farming, poultry projects and supplies.

Elegant

It is available to people who belong to a group that has benefited from the YEDF and repaid their loans.

Conditions for youth enterprise development fund loan

• Be a member of a group and be recommended by 75% of group members.
• Group minutes indicating the lending power and loan guarantee must be attached as part of the application documentation to the YEDF headquarters.
• In the first instance, a maximum of 80% of the members can go into debt. Subsequent financing for the next group of members will occur after two installments of the first loan have been paid.

It is intended for groups who are new consumers of the fund’s products.

Requirements for collective loans

• Copy of valid group registration certificate and membership certificate.
• Copies of identity documents of all members.
• Commitment signed by the group to pay guaranteed loans to its members.
• Group minutes nominating an applicant for a particular loan round
• Duly completed loan application form.

Talanta loan

The loan is available to young people in the creative/performing arts. The applicant may be an individual, a registered group, a partnership or a business owned and operated by the young person.

The loan can be used for working capital or to purchase talent-related equipment.

Young people can access up to 2 million Kenyan shillings. It has no interest but at the time of disbursement a management fee equal to 5% of the loan amount will be withheld.

Loans up to Sh300,000 will be secured by movable assets, while loans above Sh300,000 will be secured by conventional securities.

Young people must have 2 guarantors, one of which is from the sector.

Repayment period

Contract financing is for a maximum of 6 months. The purchase of equipment accessories has a maximum duration of 2 years.
The estimated recording, production or performance has a maximum duration of 3 months.

Amount Financed

For films, no more than 70% of the contract value.
For equipment and accessories: no more than 70% of the cost.
Budgeted recording, production or performance, 90% of budget.

Requirements

• It must be registered with the corresponding authorized body.
• You must have a valid contact number where applicable.
• For music, you need to have recorded audio or video evidence or proof of work in progress.
• You must have a budget accompanied by invoices or estimates, if applicable.
• You must have 2 guarantors who must submit bank statements, one of whom must be in the industry.

Otherwise, the applicant will have to provide a conventional guarantee.

Incubator loan product

The Youth Enterprise Development Fund provides young people with egg incubators on credit.

Youth Enterprise Development Fund Contact info

Fourth Floor Renaissance Corporate Park, Elgon Road, Upper Hill, Nairobi

Telephone: 0723 522 841, 020 221 1672

Email Address: info@youthfund.go.ke, complaints@youthfund.go.ke