How to Apply for Youth Fund Mobile Loan in Kenya

The Youth Fund Mobile Loan is a beacon of hope for young entrepreneurs in Kenya, offering accessible financial assistance to kickstart their business ventures.

In an era where accessing capital can be a daunting task, this innovative financial product stands out as a promising solution tailored specifically for individuals aged between 18 and 35.

With the convenience of mobile platforms, the Youth Fund Mobile Loan provides a streamlined application process, making it easier than ever for aspiring entrepreneurs to secure the funding they need to turn their business ideas into reality.

In this article, we’ll be reviewing the step-by-step process for accessing this loan product. 

The Youth Enterprise Development Fund

The Youth Enterprise Development Fund is a government agency that falls under the Ministry of Public Service, Gender, and Youth Affairs.

It started in December 2006 and became an official state corporation in May 2007. This fund is a big part of Vision 2030, which is all about making Kenya better by 2030.

Its main goal is to help young Kenyans get into business and create jobs for themselves and others.

The Fund’s main aim is to help young people find work by supporting them in starting their own businesses instead of just looking for jobs. It does this by giving them easy and cheap financial help and helping them develop their business skills.

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What is the Youth Fund Mobile Loan?

The Youth Fund Mobile Loan is a financial product specifically designed to cater to the financial needs of young entrepreneurs in Kenya. 

It provides accessible and affordable credit to individuals aged between 18 and 35 years who seek to start or expand their businesses. The loan is accessible through mobile platforms, making it convenient and efficient for applicants.

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How to Apply for Youth Fund Loan in Kenya

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

1. Visit the Youth Office: 

You can apply for the Youth Fund loan by going to the youth office in your area. You can go alone or with others who are also interested in applying.

2. Fill Out the Form: 

You’ll need to complete the application form for the Youth Fund loan. The form you use will depend on the type of loan you’re applying for. You can get the form from the office, or if you prefer, you can download it from the Youth Fund website.

3. Submit Your Application: 

Once you’ve filled out the form, return it to the youth office. Then, you’ll need to wait for a response from the loans officer. They will review your application and get back to you.

4. Guidance from the Loans Officer: 

If your application is successful, the loans officer will guide you through the next steps.

They’ll help you with any paperwork that needs to be completed and provide you with financial advice to ensure you make the most of the loan.

5. Training and Support: 

After your application is approved and you receive the funds, you’ll receive training and support. This will help you understand how to manage the loan and make timely repayments.

6. Use the Loan Wisely: 

It’s important to use the loan for the purpose you stated in your application. This could be starting or expanding a business, furthering your education, or another approved use.

Using the loan responsibly will help you achieve your goals and maintain a good relationship with the Youth Fund.

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How to Apply for Youth Fund Mobile loan in Kenya

1.Research and Preparation:

Before applying for the loan, take the time to research and gather all the necessary information.

This includes understanding the terms and conditions of the Youth Fund Mobile Loan, determining the loan amount needed, and preparing the required documentation.

2: Registration

To begin the application process, you need to register with the Youth Fund. This can typically be done through their official website or designated mobile application.

Provide accurate information during the registration process to avoid delays or rejections.

3: Application Submission

Once registered, you can proceed to submit your loan application. Fill out the application form carefully, ensuring all information provided is accurate and up-to-date.

Be prepared to provide details about your business, including its nature, location, and financial projections.

4: Documentation

Alongside your application form, you will be required to submit supporting documentation. This may include:

• Business plan
• Copy of national identification card
• Proof of business registration
• Bank statements
• Any other relevant documents requested by the Youth Fund

Ensure all documents are properly prepared and organised to make the application process easy.

5: Loan Review and Approval

Once your application and documents are submitted, the Youth Fund will review your request. This process may take some time, so be patient.

During the review process, the Youth Fund will assess your business proposal, financial viability, and creditworthiness.

6. Disbursement

Upon approval, the loan amount will be disbursed directly to your mobile money account or bank account. Ensure that you have provided accurate account details to avoid any delays in receiving the funds.

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Criteria for the Youth Fund Mobile Loan

To qualify, applicants must meet the following requirements:

• Applicants must be between 18 and 35 years old.
• Applicants must be Kenyan citizens.
• The individuals should have a registered business or demonstrate the intent to start one.
• A positive credit history enhances the chances of loan approval.
• Applicants must adhere to the rules and regulations set forth by the Youth Enterprise Development Fund.

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What are the Youth Fund Loan requirements for groups?

To access loans as a group, certain criteria must be met to ensure eligibility and accountability. Below are the necessary conditions for groups seeking financial support:

• The group needs to be officially registered by the government.
• The group must have at least 5 members, with at least 70% of them being young people aged 18-34. All leadership roles must be filled by young people.
• The group must have a bank account where the loan money will be deposited.
• A completed loan application form must be submitted by the group.
• Each member of the group must sign a promise to repay the loan.
• The loan repayments will be made to the Youth Enterprise Development Fund’s bank account, which will be provided by Youth Fund officers.
• While there’s no interest on the loan, there’s a one-time fee of 5% for managing the loan, which will be deducted when the loan is given out.

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What are the Youth fund Loan requirements for Individuals?

Before applying for a loan as an individual, it’s important to understand the specific requirements to ensure a smooth application process. 

Here are the necessary conditions for individuals seeking financial assistance:

• For partnerships, at least 70% of the partners must be aged between 18 and 34 years old.
• The borrower is responsible for covering all expenses, including insurance, security arrangements, valuation, charge or chattel registration, and legal fees.

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Who can get loans from the Youth Fund in Kenya?

To get these loans, young people need to be part of small groups, often called “Chama.” 

These groups can come up with business ideas and then ask the organisation for money to start them. These loans are offered at local levels to make sure everyone, no matter where they live, can get the money they need.

But individual young people can also get loans from the fund to expand their businesses or buy things that help them make money.

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What are the Different Types of Youth Enterprise Development Fund Loan?

The Youth Enterprise Development Fund offers different types of financial support tailored to the needs of young entrepreneurs.The loan could be either Business expansion loans,Talanta loans,

Bid Bonds and LPO financing or constituency-based loans

Here are the types of assistance they provide:

1.Vuka Loans:

These loans are specifically for individual youths who already have another reliable source of income.

They can be used as working capital or to buy assets for the business. For startups, the loan amount can go up to Ksh. 500,000, secured by regular assets.

For business expansion, applicants can get between Ksh. 100,000 and Ksh. 5,000,000. These loans have a 6% interest rate and a 1% management fee. Loans under Ksh. 100,000 are secured using assets like chattels or stock, while loans over Ksh. 100,000 require conventional security.

2. Talanta Loan

The Talanta Loan is only for young people who are into arts like music, acting, or other creative stuff. You can get this loan if you’re by yourself or part of a group that’s officially registered and wants to use local talents.

There’s no interest on this loan, but you have to pay a fee of 5% to manage the loan. You can borrow up to Ksh. Three hundred thousand, and you’ll need at least two people who can guarantee you’ll pay it back. They should also be active in the same field you’re into.

If you’re using the money to make a film, you’ll get less than 70% of the total contract value. If it’s for buying equipment, you’ll get up to 70% of the cost.

But if it’s for putting on a show or performance, you can get up to 90% of the money you need.

How long you have to pay back the loan depends on what you’re using it for. If it’s for a specific project, like a contract, you have up to six months to pay it back.

For buying equipment, you have a maximum of two years. And if it’s for recording, making a film, or a performance, you’ve got to pay it back within three months.

3. Bid Bonds and LPO financing 

They offer support to young individuals and groups involved in government contracts. This assistance is open to young people, groups, and companies owned by youths. The goal is to empower young entrepreneurs in tendering and boost infrastructure development towards achieving Vision 2030.

To make services more accessible, the Youth Enterprise Development Fund plans to launch a smartphone application. Through this app, young people can apply for loans ranging from Ksh. 5,000 to Ksh. 100,000.

The app aims to streamline the loan application process, making it quicker and simpler.By following the guidelines provided, individuals can apply for a loan that meets their requirements.

It’s essential to use the borrowed funds for legitimate purposes since they need to be repaid eventually. Maintaining a good repayment record can also improve chances of securing future loans.

4. Constituency based Loans 

If you’re a young person running a business in your local area, there’s some good news for you. There are loans available specifically for businesses in your community. Here are the different types:

• Swift Loan: 

This loan is for new users of the youth enterprise development fund. If you’re part of a registered group, you can borrow up to KES 25,000 for nine months.

• Inua Loan: 

If your group’s business is ready to grow, this loan is for you. You can borrow up to KES 200,000 to expand your business.

• Special Loan: 

This loan is for groups involved in agricultural projects. You can borrow up to KES 500,000 to support your projects over 36 months.

• Rausha Loan: 

This loan is for groups looking to start a new business. You can borrow up to KES 100,000 with a three-month grace period to get your business off the ground.

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Does the Youth Enterprise Fund provide other help?

Yes, it does. Besides giving loans to groups and individuals, the Youth Development Enterprise Fund also offers other services to young people and their businesses.

These services include:

• Teaching young people how to run their businesses successfully.
• Helping them find markets for their products by organizing events where they can sell them.
• Helping young people find jobs in other countries, which helps tackle unemployment.
• Building places where young people can sell their goods at lower costs.

FAQs

Conclusion

The Youth Fund Mobile Loan presents a valuable opportunity for young entrepreneurs in Kenya to access affordable financing for their business endeavors.

By following the step-by-step guide outlined in this article and adhering to the eligibility criteria, you can increase your chances of a successful loan application.

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References

• youthfund.go.ke – About
• youthfund.go.ke – YEDF board inauguration.
• techmoran – How To Apply For Youth Fund Loans In Kenya

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