Chama-like rules for Uwezo Fund

By CITYBIZ

If you are dying for a loan to start a project in your estate, there is no more need to shop around.

There will soon be funds that you could borrow and return without paying a single cent as interest.

All you need to do is to join a group that will be able to convince the State that it could make good use of up to Sh500,000.

If your group is approved then State officials in your constituency or you MP will issue a cheque in public.

Uwezo Fund, a new entity by the Jubilee government meant to lend interest-free loans to young jobless youth and women, will soon begin operations.

It has been kick-started through Sh6 billion that would have been used in for a presidential run-off in April. Groups can borrow up to Sh500,000 as business loans and will be allowed a four-month grace period, Machel Waikenda, a government youth adviser, told The Nairobian. Youth and women groups will access the money through Uwezo Fund Committees (UFC) that will be based in the constituencies.

Borrowers will be registered women and youth groups who will in turn lend to their individual members, based on the business viability of their proposals and the ability to pay back.

This means for an individual youth or women to benefit, they must be members of a registered group. Applications will be presented to the UFC which will review and decide who gets the loan based on viability of the projects.  To enhance transparency, the committees will be expected to issue cheques to beneficiaries in public.

“Placing the money under the patronage of members of Parliament and the CDF was ill advised since many will start politicising the loans,” Nahashon Masharia, the chairman of Kasarani-based Maisha Dhabiti Self Help Group, said.

“UFC should have been constituted of youth and women elected by the people, not CDF appointees.” Uwezo will be under the Ministry of Devolution and Planning and will be managed by the UFCs across the 290 constituencies in the country.  The county woman representative will be the patron of the fund at the county level, meaning Rachael Shebesh will be in charge of the Nairobi UFCs.

“Individual enterprises that will access the money must be in groups. Other people must sign up for them so that if they default, we have a way of catching up with them and recovering the money,” Devolution Cabinet secretary Anne Waiguru told our sister publication The Standard on Saturday.

 “The fund will operate more or less like chamas. It is important to have proper accounting systems”.