According to mike Sonko, the government of Kenya through Youth Enterprises Development Fund will now give free interest loans directly to the youth.
This message was posted in Mike Sonko’s face book page, directly addressing his constituent. He said that the government through the fund will finance the projects through interest free loans to both groups and individuals who have brilliant business ideas.
The government will also introduce a Credit Guarantee Scheme to young people who do not have starting capital.
Updates
While the Uhuru Kenyatta administration did not implement a nationwide policy offering interest-free loans to youth, it did initiate several programs aimed at supporting young entrepreneurs and graduates.
Key Initiatives Under Uhuru Kenyatta’s Administration
ENABLE Kenya Agribusiness Program (2021)
In June 2021, President Kenyatta launched the ENABLE Kenya program, a Ksh2.2 billion initiative funded by the government and the African Development Bank.
The program aimed to empower 10,000 young people in agribusiness, with Ksh500 million allocated for interest-free loans to finance start-ups and Ksh900 million for low-interest credit to existing youth enterprises.
Additionally, Ksh800 million was set aside as a risk guarantee to support financial institutions providing loans to youth in agriculture.
Youth Enterprise Development Fund (YEDF)
The YEDF, operational during Kenyatta’s tenure, provided loans to youth groups for business development. In the 2024/2025 fiscal year, the government allocated Ksh225 million to the fund, with Ksh100 million earmarked for youth loans.
Applicants were required to form groups with at least 70% youth membership and a valid registration certificate. The fund aimed to promote economic sustainability among the youth.
Uwezo Fund
The Uwezo Fund, established to support women and youth in business, allocated 40% of its Ksh6 billion budget (approximately Ksh2.4 billion) as grants, where beneficiaries were required to repay only the principal amount. The remaining funds were disbursed as concessional loans through constituencies.
Legislative Developments
During Kenyatta’s presidency, efforts to amend the Higher Education Loans Board (HELB) Act to reduce interest rates or waive them for unemployed graduates were unsuccessful. In 2022, President Kenyatta rejected a bill that sought to lower the HELB interest rate from 4% to 3% and to waive interest until graduates secured employment.
He expressed concerns that such amendments would undermine HELB’s sustainability as a revolving fund.
Current Developments Under President William Ruto
Following Kenyatta’s tenure, President William Ruto’s administration has introduced new initiatives to support youth entrepreneurship:
National Youth Opportunities Towards Advancement (NYOTA): Launched in December 2024, NYOTA aims to provide Ksh50,000 each to 100,000 unemployed youth with viable business ideas. The program is a collaboration between the Kenyan government and the World Bank.
Hustler Fund Grants: In October 2024, Principal Secretary Susan Mang’eni announced plans to offer Ksh50,000 grants to youth without existing Hustler Fund debts. The initiative also includes funding for co-investment in machinery and working capital for youth-led businesses.
These programs reflect a continued commitment to supporting youth entrepreneurship and addressing unemployment challenges in Kenya.
