President Kibaki launched the Youth Enterprise Development Fund, setting
the stage for the disbursement of the Sh1 billion (US$14,5 million) kitty.
The President said it marked a new beginning for the youth, and promised
to have the account increased during the 2007-2008 Budget due to be
presented in June.

"This is only but a beginning and we will definitely make the fund
greater in the next Budget. I don’t want to say how much but it will be
much greater," he said.

From the Sh1 billion, each of the 210 constituencies will receive Sh1
million, to be loaned out without interest. About Sh690 million will be
loaned through selected financial institutions and Government facilities
like the Agricultural Development Corporation at an interest of between
seven and eight per cent. The Sh1 million-balance would cover training,
marketing, and foreign employment market development.

The launch lit up the faces of millions of jobless young people who cannot
raise start-up capital for small enterprises.

On Thursday, the President said job opportunities in the formal sector
cannot absorb the large number of young people joining the labour market
every year, and they should use the capital to set up businesses. Kibaki
appealed for additional support from local and international partners to
boost the account. Kenya Pipeline Company contributed Sh50 million towards
the fund.

The money will be handed out without security, meaning even those without
assets will gain.

The fund was also set up to train young people in entrepreneurship;
promote internships, placements and mentoring.

The Government has also pledged to support the initiative by creating a
favourable investment climate for the youth. Development partners are set
to provide technical assistance, and the Ministry of Youth Affairs is
working with other ministries to include youth issues in their programmes.
The Government has also said it will assist enterprises to market their
products abroad.

Those applying for the loan are required to hand in a business plan
showing what they plan to do and how they will service the loan.
The fund was set up to attract investment in small businesses, business
parks and markets that can benefit the youth. It was gazetted on December
8, last year, after the Government held extensive consultations with
youth, development partners and financial institutions.

Individuals or youth groups applying for loans are required to register
their businesses. The amount of credit will depend on the type of
business. Applicants should hold a bank account and a national ID card.
They will collect application forms in selected financial institutions.
The institution will set out repayment period.