Youth Fund eyes increased loans with mobile app

Youth Enterprise Development Fund chairman Ronnie Osumba. (Photo: Kipsang Joseph) 

The Youth Fund is set to launch a mobile phone application to enable its customers borrow money from wherever they are across the country.

Through the app, young people will be evaluated based on their loan requests and good records will allow them to gradually increase the amount they can borrow.

Available data shows the fund, started 10 years ago to offer loans to small-scale businesses, has lent out Sh11 billion to one million youth.

Youth Enterprise Development Fund (YEDF) Chairman Ronnie Osumba told Weekend Business that through the digital disbursement, they expect to reach more youth.

“We have many young people who cannot access our facilities because of their locations and with the mobile app we will have evened the ground for about 14 million people aged between 18 and 35 across the country,” he said.

The fund has also radically re-engineered its loans to make them easily accessible and responsive to its target customers’ needs.

Relaxed requirements

“We have relaxed the requirements to access loans for youth who are in groups. We have introduced new products targeting youth who desire to start individual businesses as well as those who wish to venture into various sectors of the economy such as agribusiness and the creative industry,” said Mr Osumba.

He said there was a five-fold increase in loans uptake from Sh20 million in 2015-2016 to the current financial year where youth were borrowing Sh120 million per month.

According to him, Sh400 million had been dispersed since July with another Sh120 million applications awaiting approval before end of the year.

“We have cut down on the bureaucracy. Previously you required three committees for the loans to be approved; today, the application is uploaded and appears at the headquarters at the same time. It can take only a day or two to get the money,” he said.

The chairman said loans that once took three months are now being processed in two weeks and they intend to shorten this duration further before the end of the year.

He said when he took over as chairman of the board, the fund was disbursing between Sh20 million and Sh30 million a month but they set out on addressing the challenges that stood between the youth and its services.

“We are currently doing Sh90 million to Sh100 million per month. In the last financial year we did a total of Sh300 million but since July to date we have done Sh320 million, in just five months. We hope to disburse between Sh800 million and Sh1 billion by the end of the financial year,” he said.

“Our repayment rate has improved steadily and currently stands at 80 per cent,” he said.

Repayment

Interestingly, the Youth Fund did not experience a slow-down of loan uptake or repayment during this year’s prolonged electoral cycle.

“The electoral process lasted a whole year and there were a lot of uncertainties that affected businesses,” said Osumba.

“However, the electoral period coincided with our harvesting season - the period we were expecting returns from our various re-engineering and sensitisation initiatives.” 

Majority of the youth that take loans are from the agribusiness and trade sectors.

“We have, however, introduced new loan products to encourage the youth grow talent-based enterprises as well as acquire machinery for agri-processing,” said Osumba.

He said they had launched the Talanta and agriBiz products which are now popular with the youth.