BACKGROUND OF THE FUND

The Youth Enterprise Development Fund(YEDF) was conceived in June 2006 by the government as a strategic move towards arresting unemployment which is virtually a youth problem. Seventy five percent (75%) of those unemployed are the youth. The government set aside Kenya shillings One billion (Ksh. 1 billion) in the 2006/07 budget to fast-track this noble and timely initiative and increased it by a further Ksh.750 Million in the 2007/2008 budget.

The Youth Enterprise Development Fund was officially launched on 1st February 2007 by His Excellency President Mwai Kibaki. This launch marked the beginning of the Fund disbursement process to the youth enterprises through the Financial Intermediaries and the Constituency Youth Enterprise Scheme.

THE OBJECTIVES OF THE FUND

1. Provide loans to existing micro-finance institutions (MFIs), registered non-governmental organizations (NGOs) involved in micro financing, and savings and credit co-operative organizations (SACCOs) for on-lending to youth enterprises;

2. Attract and facilitate investment in micro, small and medium enterprises oriented commercial infrastructure such as business or industrial parks, markets or business incubators that will be beneficial to youth enterprises;

3. Support youth oriented micro, small and medium enterprises to develop linkages with large enterprises;

4. Facilitate marketing of products and services of youth enterprises in both domestic and international markets; and

5. Facilitate employment of youth in the international labour market.
Kenya Industrial estates (KIE)Ltd is one of the financial intermediaries in partnership with the fund and was selected due to its long experience with the SME sector and a national branch network covering all parts of the country.

KIE’s YEDF investment in any one enterprise is in keeping with national objectives and strategies as articulated in government policy documents particularly Ministry Of Youth Affairs objectives.

KIE lends to enterprises especially those engaged in value adding activities. Service industries that are complementary to the manufacturing sector may be considered.

Special consideration is being given to enterprises utilizing local raw materials and emphasize on creation of employment in relation to the capital invested. In addition, export oriented enterprises receive priority treatment.

KIE is financing enterprises, which create new productive assets.

TERMS & CONDITIONS FOR YEDF PROGRAM

Eligibility
1. Kenyan youth (18 – 35 years)
2. Must have a viable business idea or running an existing business
3. Loan size – from Kshs 50,000/= to Kshs 500,000/= but exception may be granted for larger projects.
4. Interest rate – 8 % p.a. calculated on reducing balance.

Repayment period:

1. For loans up to Kshs 500,000/= maximum of 3 years with a grace period of 3 months.

Security:

1. Chattels mortgage on equipment (existing and new)

2. Collateral security (at least 140%) for;
   -Loans for working capital
   -Loans for construction /modification /installation /electrification /freight charges.
   -Chattels that are easily movable and/or fast depreciating

3. Fees and insurance cover

4. Two guarantors

Frequently Asked Questions about the Youth Enterprise Development Fund

1. What are the requirements for the youth fund?

    One needs to undergo a five day training at a small fee, after which at the end of the training,
    they fill out a business plan which will be used to approve or defer his or her loan application

2. What is the interest rate?
    8%

3. How much can I apply for?
    Loan size – from Kshs 50,000/= to Kshs 500,000/= but exception may be granted for larger
    projects.

The fund is currently being loaned out as a revolving fund.

For further information, please contact:

YEDF Programme Co-ordinator
KENYA INDUSTRIAL ESTATES LIMITED
P.O Box 78029
Nairobi, Kenya
Phone: 020-651348/53
Fax: 651355

Email:yedf@kie.co.ke