How to Apply for a Youth Fund Loan in Kenya

Carson O.
8 Min Read

Introduction to YEDF

The Youth Enterprise Development Fund (Loan) is a state corporation established through the YEDF Act of 2006. Its mandate is to sustainably increase economic opportunities for Kenyan youth aged 18-35 years. The fund provides loans, business development services, enterprise training and market linkages. Over the last decade, YEDF has disbursed over KES 12 billion to over 640,000 youth enterprises and created over 480,000 jobs in Kenya.

The fund aims to provide affordable and accessible financial, business development and mentorship support to aspiring and existing youth entrepreneurs. The goal is to nurture innovative and commercially viable youth-led enterprises to drive economic growth and employment creation.

YEDF collaborates with financial intermediaries to avail funds through loans to eligible youth across the country. The intermediary organizations include banks, microfinance institutions, savings and credit cooperative organizations (SACCOs), NGOs and other channel partners.

Eligibility Criteria for YEDF Loans

To qualify for funding through YEDF, applicants must meet the following criteria:

  • Be a Kenyan youth aged 18-35 years old.
  • Operate a business or have a viable business idea/proposal.
  • Organized in groups, self-help groups, associations, partnerships, companies or cooperatives.
  • Have a YEDF-compliant savings account with an authorized YEDF intermediary.
  • Attach a valid Kenya Revenue Authority certificate and PIN.
  • Attach a copy of your National ID/Passport.
  • Have benefitted only once before under the scheme.
  • Show proof of residency e.g. lease agreement, utility bill etc.
  • Have no pending criminal cases and provide a police clearance certificate.
  • Attach a certificate of business registration and CR12 form if registered.
  • Provide audited accounts of an existing business.
  • Attach title deed, logbook or sale agreement if assets are used as collateral.
  • Adhere to loan processing and disbursement procedures set by intermediaries.
  • Committed to making youth-focused interventions that meet set targets.
  • Attain a minimum grade of D+ (D Plus) in KCSE or equivalent.

Therefore, youth with viable business ideas that meet the above criteria can apply for loans of between KES 50,000 to KES 5 million to start or grow their enterprises.

Types of YEDF Loans Available

YEDF provides various loan products tailored to meet the needs of diverse youth enterprises at different stages. The loans come with attractive benefits like longer repayment periods, discounted interest rates and flexible collateral requirements.

The types of YEDF loans available include:

1. Start-up Business Loans

  • For beginning youth enterprises.
  • Amounts from KES 50,000 to KES 500,000.
  • Repayment period of 1-2 years.
  • Interest rate of 8% p.a. on a reducing balance.

2. Existing Business Loans

  • For already operating youth businesses.
  • Amounts from KES 50,000 to KES 5 million.
  • The repayment period of 1-5 years depending on the amount.
  • Interest rate of 8% p.a. on a reducing balance.

3. Talent Development Loans

  • For youth in creative sectors like arts, music & film.
  • Flexible unsecured loans of up to KES 300,000.
  • Repayment period of 1-3 years.
  • Reduced interest rate of 5% p.a. on a reduced balance.

4. Innovation Loans

  • For youth with innovative business ideas & prototypes.
  • Flexible unsecured loans of up to KES 500,000.
  • Repayment period of 1-3 years.
  • A discounted interest rate of 5% p.a. on a reduced balance.

5. Agricultural Loans

  • For youth in farming, livestock & agribusiness.
  • Asset-financed loans from KES 50,000 to KES 3 million.
  • The repayment period of 1-5 years depending on the project cycle.
  • Interest rate of 8% p.a. on a reducing balance.

6. Women & Special Interest Groups Loans

  • Targeted loans for women and special groups like Persons with Disabilities (PWDs).
  • Flexible collateral requirements.
  • Loans of between KES 50,000 to KES 500,000.
  • Lower interest rate of 5% p.a. on a reducing balance.

Therefore, there are YEDF loans available for youth in all sectors, for start-ups or existing enterprises, with attractive and affordable financing terms. The size and type of loan applied for depends on specific business needs.

How To Apply for YEDF Funding

To apply for funding, youth groups or individuals should follow these key steps:

  1. Identify a YEDF intermediary organization nearest to you e.g. bank, MFI or SACCO.
  2. Open a YEDF-compliant savings account with the intermediary if you don’t already have one.
  3. Familiarize yourself with the intermediary’s loan products, requirements, application process and timelines.
  4. Gather and prepare all the required supporting documents for your loan application.
  5. Fill out and submit the loan application form provided by the intermediary.
  6. Package and submit all attachments required i.e. IDs, certificates, accounts, collateral documents etc.
  7. The intermediary will review your application and may undertake due diligence e.g. background checks, visit your business etc.
  8. If successful, you will be informed of the approved loan amount and financing terms e.g. interest rate, repayment period, disbursement process etc.
  9. Accept the offer, sign contracts and provide any other documentation needed to finalize disbursement.
  10. Received the disbursed loan amount into your savings account.
  11. Make prudent use of the funds and begin making repayments as per schedule until completion.

It is advisable to engage the services of intermediary loan officers who can guide you through the entire process. Promptly provide any additional information requested during the appraisal to facilitate timely processing and approval.

Key Application Tips

To boost your chances of getting approved, apply for an amount that matches your repayment ability. Prepare a viable business plan with realistic financial projections. If existing business, provide records showing steady cash flows. Formalize your youth group and open a joint savings account. Meet all eligibility criteria and collate the required attachments. Assign roles e.g. chairperson, treasurer and provide valid contacts. Actively engage during appraisal and be ready to clarify any issues.

Where to Obtain Application Forms

The intermediaries usually avail dedicated YEDF loan application forms both online and at their banking halls. You can also download application forms from the YEDF website or directly from partner organizations like banks. Completed forms are submitted in hard copy with attachments to intermediaries either digitally or physically for processing.

In summary, the Youth Enterprise Development Fund presents a great opportunity for enterprising Kenyan youth to access affordable financing and business support to turn their ideas into viable enterprises. By meeting the eligibility criteria, choosing a suitable loan product, and preparing professionally and closely engaging intermediaries, your chances of getting approved are high. With proper utilization, the funding can be a Launchpad for creating successful and sustainable youth-led ventures.

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I am a multi-faceted professional with a strong foundation in Business and Finance, honed since 2020. Additionally, I possess a deep passion for automobiles, serving as an avid car enthusiast. In parallel to my diverse interests, I am also a dedicated student pursuing a career in the medical field.

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