Youth fund takes shape

The Youth Venture Fund, announced last year in June during the national budget reading, will furnish loans, at a fixed 15% interest rate, to small and medium-sized businesses that can employ majority of young people. At the market rate, loans from commercial banks attract interest rates as high as 29% per month.
Maria Kiwanuka, the minister of Finance, Planning and Economic Development, said the loans from the fund will be accessed through three participating banks: Stanbic, dfcu and Centenary. Jim Mugunga, the spokesperson of the ministry of Finance, said the money is already available.
“Everything is set and those interested can apply now,” said Mugunga. The details come almost seven months after the fund was announced, and some youth were getting agitated and threatened to stage street protests.
Kiwanuka said the fund targets start-ups and small to medium size enterprises (SMSE) owned by youths. Youths aged between 15 and 35 years, with a minimum of O-level education, are eligible for the loans. Individual entrepreneurs can borrow as much as Shs 5m. A group comprising of at least five shareholders will access credit of up to Shs 25m.
A statement from the ministry of Finance emphasizes that successful applicants will be enrolled onto entrepreneurship training in any of the government approved institutions for “purposes of mentoring the borrowers under this scheme.” Enterprise Uganda had been listed for this role.
Kiwanuka explained that the fund was set up with resources from government in partnership with Germany’s, KFW, to a tune of Shs 12.5bn. The three participating banks have mobilized the other amount of Shs 12.5bn.
“To ensure that the fund grows and is effectively rolled out to achieve wider coverage, we need to prudently manage it and allow our partners to remain accountable to their shareholders,” said Kiwanuka. The fund will target entrepreneurs in sectors like manufacturing, construction, agro-processing, fisheries, livestock, health, transport, education, tourism, ICT, printing and service contractors.
Source Observer