Government to curb unemployment through Biashara Kenya Fund
The government under the Treasury decided to merge up the Uwezo Fund, Youth Enterprise Development Fund (YRF) and Women Enterprise Fund (WEF) to form Biashara Kenya Fund. A proposal for the merger has been tabled in Parliament awaiting approval. The aim of the merger is to easily assist many unemployed Youths, Women and the disabled to create their own employment. The government wants the Youths to form a Youth group whose members must be between the ages of 18-35 or at least 70% of the Youth be between the set age limit.
The Biashara Kenya Fund targets to accommodate the women, the disabled persons and the youths who must be in a registered group to be considered for the loan at rates half the interest rates by commercial banks. The CBK lending rate for commercial bank currently is capped at 13%, but the Biashara Kenya Fund will give the youth, women and the disabled people loans at only 6%. The New Biashara Kenya Fund is set to receive Sh 2 billion to kick start its operation this year.
According to Treasury, the Biashara Kenya Fund under its new regulations will not only target these special groups but will lend its part of money to commercial banks and Saccos for on-lending to special groups at a maximum interest rate of 10%. The commercial banks on the other hand will borrow the Fund at an annual interest rate of 3%. The Treasury has emphasized that the money borrowed from Biashara Kenya Fund is to be used strictly for business and business only. Those interested in the Fund are required to produce evidence or any documents that proves that the business is in existence.
As the government moves to merge the various funds available for the youth, women and the disabled, the question is still open on whether the methodology for lending is actually viable. For example, how possible is it for a large group of 10 to 15 people to have a smooth running business void of friction, and that the said individuals can have a clear cut vision and a thoroughly thought out plan to executive the vision? Also, as the businesses that are likely to be opened by these youths are not new businesses neither will the government be creating new markets for the same products/services the youth/women/disabled may want to venture into, how will the funds create jobs? Or will it be a matter of giving Bob a job at the expense of Peter who will be forced to close shop due to new entrants in his business segment?
See also: THE POSITIVE CONSEQUENCE OF SONKO’S BAN OF BODABODA IN CBD
