Youth Enterprise Development Fund chair Fatma Barayan [with trophy] at Tononoka social hall in Mombasa on Wednesday / BRIAN OTIENO
Youth in Mombasa have called for a reduction from 25 to 10 per cent of the conditional asset financing requirement to enable more people access the Youth Fund loans.
The asset finance loan given by the Youth Enterprise Development Fund, popularly known only as the Youth Fund, requires those applying for loans to contribute 25 per cent of the value of the asset they want to purchase in order to qualify for financing.
Some 14,800 youth in Mombasa have already benefited from the loans with more than Sh148 million disbursed, Youth Fund chair Fatma Barayan said.
However, majority of youths say they are unable to raise the 25 per cent requirement.
Collins Sanga, chairman of Power Raiders Self Help Group, told a forum on Wednesday that they had difficulties raising Sh137,500 which was 25 per cent of the amount they wanted to apply for as loan to be able to buy a tuk-tuk.
“We are a group of 17 youth who are from humble backgrounds. Some of us never completed formal education because our parents could not afford the fees,” Sanga said.
He spoke during a Youth Fund beneficiaries’ products showcase forum in Mombasa.
Sanga said they thought they would buy the tuk-tuk faster but were shocked to learn of the 25 per cent requirement.
“We had to delay our plans for more than two years so we can contribute Sh50, Sh100, or any amount we could raise so that we could have something substantial to start with,” Sanga said.
He however noted that during those two years, many of them left the group because they lost hope.
“I am afraid that some of those we started with us left and became wayward. If only that product is reviewed so that we could at least start with 10 per cent of the purchase price, maybe we would still be with those we started with,” Sanga said.
Barayan said the issue was one of the major takeaways from the forum.
She noted that one of the requirements of the asset financing programme of the Youth Fund is for them to pay 25 per cent of the total cost of the asset they want to purchase.
“However, the youth in Mombasa have decried the percentage saying it is too high for, especially, those who are starting out. They want it reduced to at most 10 per cent. This is a serious matter that we will be discussing as a board,” she said.
The youth also want the issue of collateral for those who want to take loans of more than Sh300,000 reviewed, saying they do not own any assets.
Barayan said the fund’s policy insists on guarantors and security.
“But the youth are uneasy about it. In Mombasa, most of the young people say even their parents own houses but which are on lands which do not have titles,” Barayan said.
The youth want the fund to review their policies and allow them to use allotment letters as security.
“These are the feedbacks that we have been getting and we are going to have a serious meeting to discuss these, especially the security issue. We need as many youth as possible to benefit from these funds and therefore we need to remove any bottleneck that prevents them from benefiting,” Barayan said.
She said the Youth Fund board will meet to discuss the emerging issues from across the country.
Board member Ayabei Almaida said all the funds available to the Kenyan youth are geared towards empowering them so as to build a better Kenya.
He said the government has a vision for the youth.
“That is why we have not only the Youth Fund but also many other funds like the Uwezo Fund, the Women Enterprise Fund, the Hustler Fund, and most recently the Nyota Fund,” Almaida said.
Sanga said they fund helped them buy tuk-tuks.
They first took a Sh100,000 loan in 2021 and another Sh300,000 after successfully repaying the initial loan.
“We added some amount we had on our bank account and bought our first tuk-tuk,” he said.
They then took a third loan of Sh500,000 with which they bought their second tuk-tuk.
They have currently submitted a proposal for Sh1 million with which they plan to buy two more tuk-tuks but the Fund has raised doubts over their ability to repay it.
“We do table banking that produces Sh3,000 as savings every week. Now we have Sh700,250 outside as loans and we collect almost Sh30,000 a week,” he said.
Catherine Mugure who chairs the Turn to Shine Group, said they have been taking Youth Fund loans since 2018.
They are in the agribusiness where they rear chicken, ducks, goats and rabbits.
“Our first loan was Sh100,000, then we took Sh200,000 as our second loan. We then got Sh450,000 as our third loan and now we wanted Sh800,000 as our latest loan but there were challenges and they gave us Sh450,000. But this did not dim our lights,” she said.
They have since expanded their project and now also sell vegetables that they grow.
“We are planning to rear cows and fish as our next project,” she said.
Mugure said youth out there should not sit idle saying there are no jobs.
“There are ways to get help so you can be self-employed,” she said.
During challenges, like during the Covid-19 period, when they were stuck with a Sh200,000 loan, the Youth Fund connected them with an organization called MDNA that deals with drought management.
“The organization gave us 400 chicks and 24 bags of their feeds for free and we got back to our feet,” Mugure said.
Now we have expanded our chicken rearing project from about 200 chicken to about 1,000.
Barayan said she feels encouraged when she hears success stories from Mombasa youth who have used the Fund as a launch pad for their small businesses.
She called on youth not to take the fund for granted.
“Youth Enterprise Fund is home,” Barayan said.
“Many still have the perception that one can only be employed. But this shows that it is possible to employ yourself,” she said.
She said it is possible to start a business because the fund provides financial literacy training.
“Right now we are using loans, but there will be a time I will be giving you grants as the Mombasa woman representative should I be successful in my bid as the Mombasa woman rep in 2027,” Barayan said.
She called on the youth to reign in their fellow youth and help them get into entrepreneurship so as to avoid having idle youth who will be vulnerable to politicians who would want to misuse them as goons during the electioneering period.
“If we have as many youth as possible running their own businesses, no one would want violence that can easily affect their business. This way, we would have reduced or eliminated political violence,” Barayan said.
The Fund chair said loan recovery has improved as more youth now appreciate the benefit of the fund and have become more serious and disciplined in repayment.
Intake has also improved with Mombasa having taken Sh148 million in Youth Enterprise Fund loans.
“We have been able to support 14,852 youths. That only shows you the more they take, the more is repaid,” Barayan said.
