- So far, the government has distributed more than Sh10 billion to the youth and Sh7 billion to women.
- The Youth Fund was started in 2006 while the women’s one was launched in 2007, both by then President Mwai Kibaki.
- “This (interest rates) limits (access to) these funds and at the same time hampers repayment due to the punitive interest rates.
The government will stop disbursing billions of shillings to youths and women through banks, following complaints about high interest rates levied on the funds.
Public Service, Gender and Youth Affairs Cabinet Secretary Sicily Kariuki on Friday said the government was unhappy with the high rates, saying they were scaring away potential borrowers.
She said the banks are making huge profits from the money but they are hampering the uptake of loans.
“While the government channels these funds to these intermediaries at one per cent interest rate, the intermediaries do not extend this advantage to beneficiaries and instead loan out monies at commercial rates of 8 per cent and above, hence raking in massive profits that are not surrendered back to the funds,” she said when she addressed reporters in her office at Harambee House in Nairobi.
So far, the government has distributed more than Sh10 billion to youths and Sh7 billion to women.
The Youth Fund was started in 2006 while the women’s one was launched in 2007, both by then President Mwai Kibaki.
“This (interest rates) limits (access to) these funds and at the same time hampers repayment due to the punitive interest rates.
“Moving forward, we will gradually reduce and eventually terminate the amount of funds disbursed through financial intermediaries so that target beneficiaries can reap the full benefits of these funds,” the CS added.
The government has channelled the funds through leading banks, including Equity, Family and K-Rep, in a bid to make it easy for youths and women to get them.
However, this seems to have backfired and the youths may soon get the money directly through the fund offices in the counties or through the head office in Nairobi.