Youth Enterprise Development Fund

The Youth Enterprise Development Fund was conceived in June 2006 by the government as a strategic move towards arresting unemployment which is virtually a youth problem. Seventy five percent (75%) of those unemployed are the youth. The government set aside Kshs. 1 billion in the 2006/07 and subsequent fiscal years budgets to fast-track this initiative.The Fund was gazetted on 8th December 2006 to provide the necessary legal framework to govern its use and operations. 

The Fund facilitates youth employment through enterprise development and structured labour export. The 11-member Advisory Board of the Fund was gazetted on 31st January 2007 and is 60% private sector dominated.
The Youth Enterprise Development Fund was officially launched on 1st February 2007 by His Excellency President Mwai Kibaki. This launch marked the beginning of the Fund disbursement process to the youth enterprises through the Financial Intermediaries and the Constituency Youth Enterprise Scheme.

The Objectives of the Fund

• Provide loans to existing micro-finance institutions (MFIs), registered non-governmental organizations (NGOs) involved in micro financing, and savings and credit co-operative organizations (SACCOs) for on-lending to youth enterprises;
• Attract and facilitate investment in micro, small and medium enterprises oriented commercial infrastructure such as business or industrial parks, markets or business incubators that will be beneficial to youth enterprises;
• Support youth oriented micro, small and medium enterprises to develop linkages with large enterprises;
• Facilitate marketing of products and services of youth enterprises in both domestic and international markets; and
• Facilitate employment of youth in the international labour market.

FUND ALLOCATION

1. The Kenya shillings one billion was allocated as follows:
2. Kshs. 210 million was allocated to parliamentary constituencies to finance youth groups. Each Constituency receives Kshs. 1 million.
3. Kshs. 690 million was channelled through Financial Intermediaries to finance all legally recognized forms of youth-owned enterprises
4. Kshs. 100 million was set aside to cater for the other objectives of the Fund that entail commercial infrastructure development, linkage schemes, marketing of products/services of youth enterprises, labour export scheme, and also finance some administrative expenses.

Courtesy of Ministry of Youth Affairs & Sports

The Constituency Youth Enterprise Scheme(C-YES)

The Constituency Youth Enterprise Scheme(C-YES) funds enterprises of youth groups at constituency level, in all constituencies. The loan will attract no interest but will include 5% management fee payable upfront. The amount loaned to any single group at this level must not exceed Kshs. 50,000

LOAN APPLICATION/APPROVAL PROCEDURES

The applying group will collect a proposal form from the Divisional Youth Officer, the District Youth Officer, or from the ministry’s website;

• The group submits completed business proposal forms to the divisional Youth Officer
• The Divisional YEDF Committee will screen and assess the proposals received in line with the guidelines provided
• The Divisional YEDF Committee will then forward the recommended proposals received in the order of merit to the District YEDF Committee:
• The District YEDF Committee validates and approves the proposals
• The District YEDF Committee forwards details of groups to be funded to the Fund Headquarters who process group cheques

Basic Qualifications of the Group

The applicant group should be:

• Registered with the Department of Social Services or the registrar of societies at least, three (3) months before applying for the loan. Evidence must be attached.
• Based and operating within the Division.
• Undertaking/proposing to carry out business oriented activity.
• Operating an active bank account.
• Recommended by the Divisional Youth Officer.
• Where the group is mixed, that is, having members who are either under 18 or over 35 years:
• At least 70% of the members must be aged 18-35 years:
• The leaders of the group must be 100% youth.

B.    THE ON-LENDING SUB-COMPONENT THROUGH FINANCIAL INTERMEDIARIES

The on-lending component of the Fund mainly works through Financial Intermediaries such as banks, non-governmental Organisations (NGOs), Savings and Credit Cooperatives (SACCOs), and Micro Finance Institutions (MFIs). The youth will access funds directly either as individuals or as organised entities such as groups, cooperatives, companies among others.

FEATURES

The loan targets all forms of youth owned enterprises whether individual, companies, groups, cooperatives or otherwise;

• Loan accessible to any youth owned enterprise operating within the district;
• The loan is managed by Financial Intermediaries;
• The loan attracts interest rate of 8% per annum on a reducing  balance;
• Very flexible(soft), if any, collateral required;
• The loan amount is dependent on the nature of business proposed and the lending terms of the Financial Intermediary;
• Financial Intermediary seeks approval for loan amount exceeding Ksh 500,000:

THE TARGET GROUP

The target group of the YEDF is young Kenyans aged 18 to 35 years who intend to start or expand businesses.

Modes of Disbursement

The Fund lends money to young people in two ways;

• The constituency Youth Enterprise Scheme (C-YES)
• Through the Financial Intermediaries

Financial Intermediaries in Partnership With the Fund as At 31^st Jul 2008

NO.	Financial Intermediary	Areas of Operation
1.	Family Bank ltd	Refer to note 1 below
2.	Kenya Industry Estates	All districts
3.	Kenya Women Finance Trust	Refer to note below
4.	K-REP DEV. Agency	Refer to note below
5.	Business Initiatives  and Management  Assistance Services	Embu, Kitui, Machakos, Mbeere, Meru Central, Meru North, Meru South, Mwingi, Tharaka.
6.	Nyamira Tea Farmers Sacco	Nyamira and KIsii Central Districts
7.	Taifa Sacco	Nyeri, Laikipia
8.	Nomads Welfare Development Group	Garissa district
9.	Masaku Traders Sacco	Machakos and Makueni districts
10.	Marsabit Teachers Sacco	Marsabit district
11.	Kenya Entrepreneurship Empowerment Foundation	Nyeri, Maragua, Laikipia, Eldoret, Uasin Gishu, Mbeere, Thika, Nyandarua
12.	K-REP Bank Ltd	Refer to note
13.	Small and Micro Enterprise Programme	Taita Taveta District
14.	Adok Timo	Kisumu, Nyando, Siaya, Bondo, Rachuonyo, Suba
15.	Elgon Teachers Sacco	Mt. Elgon District
16.	Taita Taveta Teachers Sacco	Taita Taveta District
17.	Baringo Farmers’ Sacco	Koibatek District
18.	Equity Bank Ltd	Refer to note
19.	Lokichoggio Coop Sacco	Turkana District
20.	Lamu Teachers Sacco	Lmau District
21.	Marafiki Sacco	Nairobi
22.	Tana Teachers Sacco	Tana River District
23.	Kuria Teachers Sacco	Kuria District
24.	Kena Roscas	Nairobi
25.	Songa Mbele Women Organisation	Maragua District
26.	Silver Ray Ltd	Labour Export
27.	Copper Group	Ijara District

For more

information, contact:
8th Floor,National Bank Building, Harambee Avenue
Tel: 254-020-2211675/1/2
Fax: 254-020-2211677
P.O. Box 48610-00100
Email:info@youthfund.go.ke
www.youthfund.go.ke