Youth Enterprise Fund will unveil a mobile loan application in April to ease loan accessibility to youths.
This comes as the government intends to consolidate the fund with other affirmative action funds such as Uwezo and Women Enterprise into one Biashara Fund. The merged fund will issue loans directly to special groups for as low as six per cent.
Youth Fund chairman Ronnie Osumba revealed the state corporation is seeking Sh300 million from Treasury as part of efforts to loan out more amounts once the app is unveiled.
“The demand is high and it is expensive to devolve officers to county and sub-county levels. I would rather have a platform which is accessible to somebody in a remote village,” Osumba said. The fund, established in December 2006 lends Sh120 million per month.
The money is given through group loans, individual loans, agri-business loans, trade finance, and talanta loans.
About 80 per cent of the requests that the fund receives are for short-term loans which Osumba thinks the Y-Mobile app can easily service. Repayment periods for short term loans last up to a month. If awarded the Sh300 million, Youth Fund will be disbursing Sh420 million a month. While breaking it down, the chairman said Sh200 million will be disbursed through the mobile application on short term basis of up to one week.
At least Sh100 million will be issued in long term facilities repayable in three or more years. Y-mobile will join more than ten mobile lending apps,. including Branch, Tala, Timiza, Haraka, Saida among others, that have seen about 6.5 million Kenyans take loans according to a report by Financial Sector Deepening.
A 2018 survey conducted by FSD-Kenya, Central Bank of Kenya, Kenya National Bureau of Statistics and Consultative Group to Assist the Poor shows Kenyans have become prisoners to mobile lending apps.
Data by Youth Enterprise Fund shows it has disbursed Sh12 billion since its inception, benefiting over 800,000 youths across the country. This is approximately Sh1.2 billion annually.
