Youth Funds Mobile Loans in Kenya in 2024

Youth funds, also known as Youth Enterprise Development Funds (YEDF), is a Kenyan government initiative that seeks to empower young people to participate actively in running successful business enterprises to eradicate unemployment. There are many youth funds mobile loans in Kenya today.

The youth funds organization operates under the Ministry of Public Service Gender and Affairs. Its key objective is to create youth employment opportunities through entrepreneurship and encouraging self-employment.

YEDF offers youth loans in Kenya to entrepreneurs at low-interest rates to facilitate business growth.  To reach more young people, the organization is seeking to introduce an application that will enable youths to access services from every corner of the country with their smartphones.

Through the mobile app, you can get loans between Ksh. 5,000 and Ksh. 100,000. The mobile app will reduce the length of youth’s processes when applying for loans.

Qualification For Youth Funds Mobile Loans in Kenya

To apply for youth funds, you must be in registered groups known as “chamas,” from which they can develop a business proposal and seek funds to realize the enterprise. Youths in the group can apply for finance from their constituency offices by visiting the youth wing. 

While looking for funds from the youth funds, as a group, you must provide the following documents:

  • Group membership list with copies of their IDs.
  • Group registration certificate.
  • Group meeting minutes authorizing loan borrowing. 

Also Read: Sources of Instant Business Loans in Kenya

Requirements For Youth Fund Loans in Kenya 

Here are the youth fund loan requirements for groups;

  • Group members must not be less than 5
  • The group must have a valid registration certificate from the relevant government body.
  • The group must have a bank account where the youth fund will deposit the money.
  • Group members must sign a guarantee to repay the loan.
  • Group members must be at least 70% youth (18-34 years), and leadership, 100% youth.
  • The group must submit a completed loan application forms

Individual Youth Loans in Kenya   

Individual youths can also access loans from the youth fund organization for business expansion and the purchase of income-generating assets.

Individual Youth Loans Requirement  

The following are individual fund loan requirements;

  • In the case of a partnership, 70% of the partners must be between 18-34 years.
  • The individual will bear all costs like legal fees, security perfection, charge registration, insurance, and valuation.

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How to Apply For The Youth Fund Loan

  1. You need to visit your respective sub-county youth offices as an individual or group.
  2. Select and fill out the appropriate youth fund application form depending on the required loan type. The loan application form is also available for download on the youth fund website.
  3. Attach the required documents.
  4.   Take the completed forms to the office and wait for the loan officer’s response.
  5. The loan officer will direct the subsequent procedures, carry out the due diligence, and provide appropriate financial advice.
  6. Following approval and receipt of the funds, you will receive training and guidance on making timely payments.

Types of Youth Fund Loans 

The Youth Enterprise Development Fund has categorized the financial assistance to suit every applicant’s specific needs. The loans differ in terms of interests and conditions. Here is a list of the funding offered by YEDF.

Talanta Loan 

This loan is only offered to youth involved in creative or performing arts. The loan can be accessed by registered groups and individuals seeking to use local talents. Talanta loan has no interest but a loan management fee of 5%. 

With this funding, you’ll secure a loan of upto ksh 300,000 using the asset you purchase. The applicants must have a minimum of two guarantors who work in the applicant’s field of interest. 

The applicant is entitled to less than 70% of the contract value if the fund is for film production. If the finance is for purchasing equipment, the applicant is only entitled to upto 70% of the total cost. For performance purposes, the applicant is eligible to finance up to 90% of the budget. 

Repayment durations vary depending on the purpose of the loan.  For funding a contract, it’s a maximum of 6 months; for purchasing equipment purposes, the repayment duration is a maximum of 2 years. If the loan is for a budgeted recording, performance, or production, the repayment duration is a maximum of 3 months.

Vuka Loans  

Vuka loans are only available for individual youths with a reliable alternative income source. The applicant can use the funding to buy business assets or as working capital. For startups, individuals are eligible for loans of upto ksh 500,000 secured by the standard securities.  For business expansion purposes, individuals are eligible for loans of ksh 100,000 and ksh 500,000. Business expansion loans attract an interest of 6 % and a management fee of 1%.

Loans below Ksh. 100,000 are secured using business assets, stock, or chattels, while loans above ksh 100,000 are secured using standard securities.

Constituency Based Loans 

This is the ideal loan for you if you’re a youth operating a business at the constituency level. There are several loans offered at this level which include;

Inua Loan 

This loan is for you if you’re a group operating a business that needs expansion. The groups can access a loan of up to Ksh. 200,000.

Rausha Loan

This type of loan is eligible for groups looking to start a business. A group can borrow up to Ksh. 100,000 with a grace period of 3 months.

Swift Loan   

This type of loan is eligible for all new users of youth funds products. The swift loan is being given to registered groups, with the first member being lent up to Ksh. 25,000 for 9 months.

Special Loan 

The special loan is entitled to groups operating agricultural business projects. The groups can therefore borrow up to Ksh. 500,000 for 36 months.

Bid Bonds and LPO Financing  

This type of loan is eligible for all organizations and young individuals taking part in government tenders. The loan is open to registered groups, individuals, and companies owned by the youths. 

This type of loan aims to empower young tenderpreneurs and promote infrastructure development in the pursuit of vision 2030.

Other Services Offered By Youth Enterprise Development Fund Organization

Besides offering loans to young people, the organization provides other services to the child and their businesses. The services are;

  1. The organization facilitates young people to get employment abroad, helping reduce unemployment in the country.
  2. The organization also offers entrepreneurship training to the youth. This is crucial to ensure that they operate their enterprises in a way that generates income.
  3. The loan further targets constructing trading spaces for young people to help reduce their operating costs.
  4. Market linkage and assistance are achieved by planning trade shows and expos so that young people can sell their goods. 

Bottom Line 

Following the guidelines provided here, you can successfully apply for a loan that best suits your needs.  These loans are available for all young individuals, registered groups, and companies owned by youths.

You should use the loans for a legitimate purpose as you’ll have to repay them after some time. Ensure to maintain a good borrowing record, as it will give you an added advantage when requesting another loan.    

The above youth funds mobile loans in Kenya are easy to access. Therefore, they are a good starting point if you want to start a business.