Youth and Women to get Loans at 6% Interest Under the new Biashara Fund

The Treasury has submitted regulations meant to guide its operations of the Sh 2 bilion biashara fund to the National Assembly for ratification.

The fund will see Women, youth and small business owners get loans from the State at six percent interest per. At six percent, the groups will borrow at half the prevailing commercial lending rate of 13 percent — a cap set by the Central Bank.

The Treasury revealed terms of the loan through Biashara Kenya Fund regulations.

Money borrowed from Biashara Fund will be used for business only, with applicants expected to prove that they have established businesses.

The Fund will also lend some of the money to intermediaries such as commercial banks and saccos, who will, in turn, lend to these special groups at a maximum rate of 10 per cent.

Biashara Fund will lend money to commercial banks at an annual interest rate of three percent.

Intermediaries who provide counterpart funding at least equivalent to the amount advanced by the Fund will, however, repay a minimum interest of one percent.

The regulations also add that not more than 25 per cent of the fund’s cash will be lent to intermediaries.

The rules cap the maximum amount that the banks or financial intermediaries can advance a single borrower at Sh3 million.

Upion approval, the fund will lead to the merger of Uwezo Fund, Youth Enterprise Development Fund (YEF) and Women Enterprise Fund (WEF). The three funds had been created to empower women and the youth in entrepreneurship but have not had the intended impacts due to lack of proper coordination.

A woman, youth or person with a disability shall be eligible to apply for a loan for business purposes if they are in a registered group where at least 70 per cent of the members are aged between 18 and 35 years.