Kenya to Provide Interest-Free Loans to Businesses Run By Women, Youth

Garissa — The Kenyan government plans to release 6 billion shillings ($68.7 million) in September in interest-free loans to fund youth- and women-run businesses.

The money, dubbed the “Uwezo Fund”, was originally set aside for a possible presidential run-off after the March general elections. “Uwezo” means “capability” in Swahili.

During his inauguration April 9th, President Uhuru Kenyatta announced that the government would develop a framework to re-purpose the money to benefit the two groups within his first 100 days in office, which ended July 18th.

“We are urging all the youths and women to get ready for loans,” Deputy President William Ruto said July 28th, announcing the September disbursal. “We will not cap any interest on them so they should not fear to apply for the money.”

Garissa parliamentarian Adan Duale said an official release date would be announced in August, with county women parliamentarians and constituency parliamentarians acting as joint patrons of the fund.

Constituencies Development Fund committees will be in charge of the funds until separate committees are formed for the Uwezo Fund, he said.

“The delay in releasing the funds was a result of developing a framework to disburse the funds,” he told Sabahi, adding that applicants can apply for loans from their constituencies, which will receive the money from the central government.

Groups of at least ten young people between the ages of 18 and 36 must present a business plan to be eligible to borrow up to 500,000 shillings ($5,720), Duale said. The requirements for women applicants will be the same, but with no age restriction.

Applicants will be required to pay 3% of the loan amount in application processing fees, he said.

“Recovering the loan from an individual defaulter is more difficult than recovering from a group,” he said, adding that re-payment will allow the money to benefit more people. “The loan must be re-paid so that those who do not benefit in the first disbursement can benefit from subsequent disbursements.”

Rachel Shebesh, a woman representative from Nairobi County, said the funds would enhance economic growth by empowering women and their families.

“Youth and women account for more than 60% of the population. By empowering them, the country’s Vision 2030 will be realised,” she told Sabahi, adding that the Uwezo Fund will complement existing funds such as the Youth Enterprise Development Fund and Women Enterprise Fund.

Justus Mochere, 33, treasurer of the Mwamanua Youth Group in Kisii County, said his group has applied to the Uwezo Fund for 200,000 shillings ($2,300) through the Kitutu Chache constituency.

He said the Mwamanua Youth Group wants to start a poultry farm and expand a fish farming project in operation for more than a year.

“We have been avoiding seeking loans from the other funds because of the deterrent interest charged, but the interest-free Uwezo Fund is friendly to us,” he told Sabahi. “We hope to expand and support our families.”

Garissa resident Abdikadir Hassan Abdi, 29, said he hoped the funds would be distributed fairly.

“Some of the committees that will be in charge of the Uwezo Fund have previously practiced favouritism,” he said. “If the committees continue with their polarising and discriminating tendencies, it will be a recipe for social tension, tribal wars and the fund’s failure.”

Leave a Reply

Your email address will not be published.