Gov't, Banks Differ On Shs25 Billion Youth Funds

Government and commercial banks yesterday clashed while presenting different conditions for eligibility of the Shs25 billion youth money.
Government signed a memorandum of understanding with Centenary, DFCU and Stanbic banks
While Finance Minister Maria Kiwanuka presented what she called a detailed statement on the funds, eligibility conditions and other necessary information on the funds, Youth MP Monica Amoding presented documents from commercial banks contradicting what the Minister told Parliament.
Last week Parliament asked Ms Kiwanuka to present details of the funds to the House after Ms Amoding and other youth MPs complained that youths countrywide had failed to access the money due to tough conditions.
Some of the conditions include an O-Level certificate.
Ms Kiwanuka said youths aged between 18 and 35 qualified to get the loans but Centenary Bank and DFCU bank statements showed that eligible youths were between 21 and 35.
Ms Kiwanuka moved to convince the House that due to public demand she had waived the requirement to have an O-Level certificate, but youths needed to first undergo mentoring in entrepreneurship and financial skills for proper business management.
O-Level certificate
However, the two banks insisted there was need to have an O-Level certificate before accessing the funds and a certified attendance of training in entrepreneurship from an institution approved by Ministry of Finance such as Enterprise Uganda.
Whereas the minister told Parliament that borrowing interest would be 15 per cent, bank documents indicated that interest charged would be 15 per cent and a penalty of 5 per cent applicable per month on the loan.
"Madam Minister, surely are these banks what you call your partners? We expect to have softer conditions for the youths," Speaker Rebecca Kadaga said.
Ms Kadaga added: "Let us complete that within the last quarter the youths get their money before the financial year ends." Ms Kiwanuka later agreed with Parliament that she returns with a final and thorough statement signed by the ministry and the managing directors of all commercial banks so that it becomes the final position on the youths' funds.
Ms Kiwanuka's plea that Banks' statements were prepared outside her ministry before the negotiations ended fell on deaf ears with scores of legislators calling for a motion to have her statement thrown out.
Ms Kiwanuka later said her ministry was still in negotiations with the commercial Banks and the documents could have been got from the banks while she still held negotiations.
To be eligible, banks need qualifying business able to offer employment to at least four people over the loan period and applicants must have a bank account in the same bank, in or open one with the same bank.