Treasury CS’s Offer to Youth Sparks Uproar

Trade CS Betty Maina. Her ministry in partnership with Treasury ministry is set to launch a loan project for the youth

The government’s plan to elevate the youth and fight unemployment has sparked uproar and questions have been raised after similar plans failed before.

The National Treasury and Industrialisation ministries under CSs Ukur Yattani and Betty Maina (nominee) are preparing to launch a new and small medium-sized enterprises (SME) loan facility which could be accessed by traders operating in Biashara Centres set to be established across the country. 

A report published by People Daily, on Thursday, January 23, stated that analysts were concerned over how the projected had duplicated efforts of past similar projects. 

Trade CS nominee Betty Maina. Her ministry, in partnership with Treasury, is set to launch a loan facility for the youth

In 2019, the government launched Stawi after the Youth Fund, National Government Affirmative Action Fund failed.

A critical bone of contention is whether the fund will be managed by the government or through banks. Prior loans schemes were marred with lack of collateral, which would make loan recovery a nightmare.

“We need to ensure that the existing facilities are efficient. However, increasing the avenues of funding is not in itself a bad thing,” Gerishon Ikiara, a lecturer at the University of Nairobi argued.

Analysts prefer a single SME loan facility that encompasses all government loaning institutions such as the Youth Development Fund, the Micro and Small Enterprises Authority and the Kenya Industrial Estates. 

Strict conditions for loaning from banks have seen small businesses struggle with access to funds. Most of them have been shut down and workers laid off. 

While speaking with in the past, Nicholas Gachara, a private financial advise, stated that banks viewed the youth as flight risk and defaulters. 

“Banks will prefer the government than the people. This means they will charge high interests as they are afraid the youth are a security risk and may refuse to pay loans. They look at the government as risk-free. The youth thus cannot get loans to employ themselves and others,” Gachara explained.

On Thursday, January 23, he argued that the only way the government’s new SME plan would be effective was to have it managed by a private entity rather than the government itself or the banks.

“It should be established independently from the government and the board members should not be corrupt. This would enable SMEs to be granted loans on merit rather than connections,” he opined. 

A screengrab from the heartbreaking video of a woman dismissed from work in October 2019, that had Kenyans communed in disappointment over heightened unemployment.
A screengrab from a heartbreaking video of a woman who was dismissed from work in October 2019, that had Kenyans communed in disappointment over heightened unemployment.

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