Youths in Kakamega, Migori and Nakuru counties top the list of beneficiaries of the State-backed Uwezo Fund, outside Nairobi, giving a glimpse of the entrepreneurial profile of this age group in regions across the country.
The progress report on the Uwezo Fund tabled in Parliament shows that 949 youth groups in Kakamega have tapped the loans, the third biggest beneficiaries after Nairobi and Kiambu that have 1,568 and 1,028, respectively.
The report by the Ministry of Public Service and Gender, however, does not give a break-down of beneficiaries per county.
Young entrepreneurs in Nakuru at 887 groups and Migori (846) groups close the list of the top five best performing counties in uptake of the fund established in 2014 by the Jubilee administration to spur employment among young people.
The report, however, shows dismal uptake of the loans by youth entrepreneurs with six counties having less than 200 groups a-piece that have tapped the credit facility.
Samburu has the least number of beneficiaries with 112 groups followed by Lamu at 122, Isiolo (135), Taita Taveta (137), Tharaka Nithi (185) and Kirinyaga at 198 groups underlining the need to scale up sensitisation efforts and re-look the credit access conditions.
Cabinet Secretary for Public Service and Gender Margaret Kobia said that tough conditions for registering businesses had hampered the success of the fund hurting efforts by the State to ease the unemployment burden among the youth.
“Some of the challenges include stiff conditions for establishing a business in forms of registration, business permits, rents, inadequate networking and linkages to well established persons, financial institutions and larger enterprises,” Prof Kobia said in the report.
“Partial participation by entrepreneurs in trainings is also a challenge. But we are training groups at their place of work.”
Turkana with 696 youth groups, Wajir (642), Mandera (535) and Garissa with 522 groups have all outshone their colleagues in Mombasa (474) and Machakos at 352— the two being part of the five wealthiest counties.
A total of 22,993 groups across the 47 devolved units have tapped the funds. Additionally, 42,309 women groups and 1,941 groups under the Persons With Disabilities (PWDs) have received a share of the Sh6.22 billion shared among the three groups.
Uwezo Fund is a flagship programme of Kenya's Vision 2030 blueprint and also includes initiatives to enable women and the disabled access funds to promote businesses and enterprise at the constituency level, thereby enhancing economic growth.
The loans do not attract interest and beneficiaries enjoy a grace period of six months and thereafter make repayments for two years.
Uwezo Fund is administered at the constituency level through a revolving fund that provides accessible and affordable credit, capacity building and market linkages to youth, women and disabled persons for their socio-economic development.
Prof Kobia told Parliament that poor quality of products from the youth groups had rendered them less competitive compared with their counterparts in the global markets.
Kenya has turned to the kitty in a bid to tame the high youth unemployment with experts warning that it is a ticking time bomb.
Data by the Kenya National Bureau of Statistics (KNBS) shows that only 78,400 new formal jobs were created in the economy last year, down from 80,800 in 2017— which was a seven-year low.
The data shows that informal jobs created rose from 744,000 in 2018 to 767,900 last year underlining the high reliance by the Jubilee administration on the jua kali sector to defuse the ticking unemployment time bomb.
Uwezo Fund has however been rocked by and accountability queries and high default rates, so rampant that the State opted to block youth from Tana Rive from accessing the credit after they failed to repay loans dating back to 2014.
The Ministry of Public Service and Gender in January last year said that youth in Tana River had paid a paltry Sh1 million from more than Sh58 million borrowed since its inception.
The office of the Auditor-General last year flagged the management of the youth fund on lack of debtors’ ledgers detailing Sh3.92 billion in loans issued since inception and repayments made over the years.
The audit office also said there were no documents of the loans issued or list of the groups that had accessed the credit in the 2017/18 period raising fears of loss of public funds.
The State is set to merge Uwezo Fund with the Youth Enterprise Development Fund and Women Enterprise Fund to form Biashara Kenya Fund.
Treasury Secretary Ukur Yatani in May published the draft regulations to guide the merging of the three funds saying that this will make it easier for women, youth and persons with disability to access cheap credit.
“The regulations establish one fund to provide a one-stop shop for targeted groups looking for business loans from government and improve effectiveness as well as eliminating duplication of efforts,” Mr Yatani said in the draft regulations.