Uwezo Fund aims to nudge Kenyan youth towards entrepreneurship and self-employment

Katy Fentress, Nairobi Community Manager

In September this year the Kenyan government launched the Uwezo Fund, a 6 billion Ksh. cash reserve (approximately $70 million) aimed at channeling financial resources into the hands of youth and women.

Money for the fund was obtained from capital set aside by the Jubilee Coalition during this year's election campaign, for use in the case of a run-off. The Jubilee Coalition, led by Uhuru Kenyatta and his deputy Samuel Ruto, pledged that any money that was not spent on the campaign would be channeled into a fund of this sort. Six months after winning the election, they stood by their commitment and announced that the application process for accessing interest-free loans was now open to registered youth and women's groups.

The aim of the Uwezo fund is to address the massive unemployment problem that affects the country, by encouraging entrepreneurship and expanding access to credit. The idea is to generate opportunities for self-employment and to enhance economic growth by investing in community-driven alternative frameworks to development and focusing on youth/women's groups and savings chamas as drivers of the country's economy.

In order to be considered, groups must apply from within the constituency they would like to operate from, hold a bank account in their name, and have written recommendations from a District Chief, and they must have been registered with the Department of Social Services for at least six months prior to application.

The government has set up the Uwezo Capacity Building Program, a training course that applicants are required to attend before they even apply for the loan. This is to ensure that the groups have the ability to invest well and eventually pay back the loans. Once the training has been completed, groups can apply for an amount that ranges from 50,000 Ksh. to 500,000 Ksh (approximately $580 to $5,800), which must be begin to be repaid after six months and subsequently over the course of two years.

The Uwezo fund is being overseen by the Ministry of Devolution and Planning. One of the central tenets of the new Constitution that was passed in 2010 was that administrative power would be decentralized to the counties of the country's provinces. The result of this is that county MPs are in part responsible for the allocation of Uwezo funds, an aspect that has led some people to fear that the wealth may be misused if not subjected to tight scrutiny. In the past, similar programs like the Youth Fund and Kazi kwa Vijana (Work for the Youth) — both flagship projects of the previous government — did not always achieve their intended purposes and, more often than not, ended up lining the pockets of those who were charged with implementing the schemes. In order to minimize this eventuality, the government has announced that it is setting up a committee that will be in charge of overseeing how the money is spent.

So far, it is too early to tell to what extent the fund will effectively create employment for Kenya's youth. The President has high hopes that it will be successful, and the Deputy's wife has been touring the country to raise its profile and encourage people to apply. In the meantime the rest of us can only wait, watch — and, if eligible, apply!