The government of Uganda through the Ministry of Gender, Labour and Social Development (MGLSD) has provided up to Shs16 billion in the next phase of the Youth Venture Capital Fund (YVCF) that Ugandans aged between 18 – 30 years will be able to borrow.
Pius Bigirimana, the ministry’s permanent secretary and Fabian Kasi, the Managing Director Centenary Bank revealed the development in an October 5 joint statement.
The YVCF caters for the youths who wish to access funds as individuals, as well as those who wish to operate in smaller groups.
In the latest development, youths who qualify for the funds will be able to access it only through Centenary Bank.
To access the money, one should “have had existing businesses/enterprises that have been running for the last three (3) months, be of sound mind and with no criminal record or bad credit history.”
First time borrowers shall be given priority to access the fund; and repeat borrowing will only be allowed for those with good and progressive track record, reads the statement in part.
Terms and Conditions of the Fund
According to the officials, a loan amount of up to Shs5 Million will be accessed to individuals, and for Partners, Cooperatives, Company or groups, up to Shs25m will be provided.
Successful applicants will be given a “Maximum loan period of 24 months for working capital and up to 48 months (4 years) for capital investment.”
The loan can be repaid monthly, termly, quarterly or bi-annually depending on the cash flows, says the statement.
For security/collateral, it adds, “each borrower must provide two (2) personal guarantors with active accounts in Centenary Bank, good credit history in case he/she has borrowed before and with no criminal record and a floating charge on the business assets. Borrowers with acceptable alternative security may be exempted from the above requirement.”
Others terms and conditions include being able “to demonstrate evidence of having invested at least 10% of the loan amount being applied for” and accepting a “maximum grace period of one year for capital investment.”
The interest rate for the Fund is 11% per annum (computed on declining-balance basis).
The statement indicates that eligible sectors include Trade, manufacturing, agro- processing, primary agriculture, fisheries, livestock, health, transport, education, tourism, ICT, construction, printing, and service contractors among others.
Youth Funds Impact so far
Initiated purposely to provide revolving funds with youth-friendly terms and conditions, the Youth Livelihood Programme has reached 144,235 youth who have accessed a sum of Shs85 billion through 11,503 groups across the country.
It was introduced by the government as part of solving the twin-problem of unemployment and poverty among the youth in the country, seeing the problems ranks very highly among the priority challenges the government is committed to address.
This support under the YLP is available to the youth who are willing to work in groups of 10-15 persons.