How to Get Youth Fund Loans in Kenya 2024

Are you looking for youth fund loan application 2023? This article will guide you in registering and applying for Youth Fund Loans in Kenya. Some call it the National Youth Empowerment Fund 2022.

As part of the strategies toward achieving vision 2030, the government flagged the Youth Enterprise Development Fund (Youth Fund Loans).

Youth Enterprise Development Fund (YEDF) is a government corporation targeting to empower the youth within the country.

The organization operates under the Ministry of Public Service, Gender and Youth Affairs. The fund’s key objective is to create employment opportunities for young people through entrepreneurship and encouraging self-employment.

Also, the organization provides youth loans in Kenya to entrepreneurs at affordable interest rates to facilitate business growth. But how can one access these loans? This article gives you a step-by-step guide on how one can successfully apply for a YEDF loan.

Related: Uwezo Fund in Kenya.

How to Apply for the Youth Fund Loan

Here is how to apply for the Youth Fund loan in Kenya:

1. One needs to visit their respective sub-county youth offices as a group or individually.
2. Pick and fill out the youth fund application form 2021, depending on the type of loan required. You can also download the loan application forms from the Youth fund website.
3. Return the filled forms to the office and wait for a response from the loans officer
4. The loan officer will guide the following steps, conduct the vetting, and give necessary financial advice.
5. After vetting and receiving the funds, you will be trained and guided on making your payments on time.
6. Be sure to use this loan for the purpose you had applied it for

Youth fund loan requirements

The following are the youth fund loan requirements:

For Groups-:

•  The group must have a valid registration certificate from the relevant government body.
• Group membership must not be less than 5
• Group Membership must be at least 70% youth (18-34 years), and leadership, 100% youth.
• The group must have a bank account where Youth Fund will deposit the loan money.
• The group must submit completed loan application forms.
• Group members shall sign a guarantee/undertaking to repay the loan
• The group will repay the loan into the Youth Enterprise Development Fund bank account, which The Youth Fund officers will provide.
• Group loans have no interest but a one-off management fee of 5%, deducted from the loan at disbursement.

For Individuals-:

• In the case of partnerships, 70% of the partners should be between 18-34 years.
• The borrower will bear all costs such as insurance, security perfection, valuation, registration of charge/chattel, and legal fees.

Types of Youth Enterprise Development Fund Loans

The Youth Enterprise Development Fund has classified the financial assistance to suit the specific needs of applicants. These loans vary in terms of conditions as well as interests. Below is a list of the funding offered by the organization.

1. Business expansion loans
2. Talanta loans
3. Bid Bonds and LPO financing
4. Constituency based loans

1. Vuka loans

This loan is only given to individual youths with a reliable alternative income source. The loan can be used as working capital, or the individual can use it to purchase assets for the business. For startups, applicants can access loans of up to Ksh. 500,000 secured by conventional securities.

For business expansion, applicants can access Ksh. 100,000 and Ksh. 5,000,000. The business expansion loans attract a 6% interest and a 1% management fee.

Loans below Ksh.100,000 are secured using chattels, stock, or business assets, while those above Ksh. One hundred thousand are secured using conventional security.

2. Talanta Loan

This funding is only available for the youth involved in creative or performing arts. This loan can be accessed by individuals or registered groups seeking to use local talents.

Talanta loan has no interest but a loan management fee of 5%. With this funding, loans of up to Ksh.

Three hundred thousand will be secured using the assets purchased. The applicants must have at least two guarantors who are active in the applicant’s field f interest.

The applicant is entitled to less than 70% of the contract value if the loan is for film production.

Only up to 70% of the total cost is given to the applicant for purchasing equipment. The applicant is entitled to funding up to 90% of the budget for performance purposes.

Repayment periods differ depending on the purpose of the loan. For financing a contract, it is a maximum of six months.

If the loan is for purchasing equipment, the repayment period is a maximum of two years. You must repay the loan after three months for a budgeted recording, production, or performance.

3. Bid Bonds and LPO financing

This type of funding is available for young individuals and organizations taking part in government tenders.

The funding is open to individuals, registered groups, and youth-owned companies. This funding targets to empower young tenderpreneurs and facilitate infrastructural development in the quest for vision 2030.

To reach more people, the Youth Enterprise Development Fund seeks to launch an application that will allow the youth to access services from wherever they are in their smartphones’ comfort. through the mobile app, the youths will access loans between Ksh. 5,000 and Ksh. 100,000.

The introduction of the mobile application will reduce the length of procedures that the youth go through when applying for the loan.

From the guidelines provided in this article, one can successfully apply for a loan that suits their needs.

The borrowed funds should be used for legitimate purposes since they have to be repaid after some time. Maintaining a good borrowing record gives one an added advantage when applying for another loan.

4. Constituency-based loans

The good news is that you are a youth running a business at the constituency level. This fund also has got you back. The various loans offered at this level include:

• Swift Loan – this loan is for all new youth enterprise development fund product users. This loan is being provided to registered groups, with the first member being lent up to KES 25,000 for nine months.
• Inua Loan – If you are a group running a business that needs expansion, this loan is for you. These groups can borrow up to KES 200,000.
• Particular Loan – Groups running agricultural business projects are offered this loan, allowing them to borrow up to KES 500,000 for 36 months.
• Rausha loan -This is for groups looking to start a startup. Therefore, a group can borrow up to KES 100,000 with a grace period of 3 months.

Who qualifies for Youth Fund loans in Kenya?

The youth need to be in small groups to access the loans, commonly referred to as “Chama.” The youth can come up with business proposals through the group and seek funding from the organization.

The loans are available at sub-county levels to ensure everyone has access to the financial support they need, irrespective of location.

However, individual youths can also access loans from the fund for business expansion and the purchase of income-generating assets.

Does the Youth Enterprise Fund Offer other services?

Yes, it does.

Apart from offering loans to youth groups, the Youth Development Enterprise Fund also provides other services to the child and their businesses.

These services include:

1. Providing entrepreneurship training to the youth. This is major to ensure that they run their businesses income-generating.
2. Market linkage and support are achieved by organizing trade fairs and expos so that the youth can market their products.
3. Moreover, the Youth Enterprise development fund also facilitates the youth to get employment abroad, helping reduce the unemployment issue.
4. The fund further aims to construct trading spaces for youth to help minimize operating costs.