Kiambu targets youth with Sh200,000 business start-up loans

Kiambu County is betting on a new mobile loan solution to promote entrepreneurship among the youth by ensuring they secure capital to start income-generating projects.

The mobile banking platform called Kiambu Biashara Fund Mobile Loan will see existing small and micro enterprises as well as start-ups get affordable capital to start or expand their businesses.

The county has allocated the initiative, which was launched last week, Sh100 million to be disbursed in form of soft loans ranging between Sh100 and Sh200,000 depending on individual’s eligibility.

Biashara Fund Mobile Loans will attract an interest rate of one per cent irrespective of the amount borrowed.

The solution has been introduced under the county’s Biashara Fund, a Sh400 million revolving fund created to enable youth, women and persons with disability access to financing.

The project is being implemented in partnership with KCB Group, which will be the custodian of the fund. No collateral will be needed for this facility.

Machel Waikenda, county executive in charge of youth and sports, said interested applicants will only be required to open a personal bank account through the KCB M-Pesa account on their mobile phones.

The accounts will be used to deposit loans to the successful applicants, who, Mr Waikenda said, will have to maintain a good repayment track record to continue enjoying the loan or increase their loan limits.

“Those (applicants) who will keep a good repayment record will gradually raise their loan limits up to Sh200, 000,” said Mr Waikenda.

“Those who will not will be denied loans while defaulters will be reported to Credit Reference Bureau to ensure they will not be able to access any loan from whatever formal source.”

Mr Waikenda said the fund was a major boost to the youth grappling with joblessness since with good business proposals, they will easily apply for capital while the existing entrepreneurs can get money to expand their businesses.

County Youth and Sports Affairs chief officer Marie Mugo said borrowers will have to first apply for Sh10,000 or less but this limit will then gradually increase to a maximum Sh200,000.

The county targets 6,000 applicants in the first month of which 100 would be from each of the 60 wards, she said.

To ensure that only Kiambu residents benefit from the loan, county youth officers and Biashara Fund committee will vet the applicants at the ward level.

“The interested borrowers will have to visit their respective ward administrators’ offices where their personal details will be confirmed by the relevant officers before being fed into a system,” said Mr Waikenda.

“From there on, they can be applying for the loans without necessarily visiting any county offices to seek approval.”

He said they are working on a programme that will ensure that they are able to ascertain that applicants are from Kiambu without having them going through the physical vetting exercise, which he acknowledged is tedious.