The Youth Enterprises Development Fund (YEDF) is a Vision 2030 flagship project and a state corporation that provides business development services and financial support to youths who own enterprises.
The corporation offers a business expansion loan, also known as a Vuka loan. The offered financing is aimed at supporting young entrepreneurs seeking to start up their businesses or expand their existing ones, who have limited finances.
An affordable interest of 8% per annum is charged on the loans. The interest charges are moderate, making it pocket-friendly for young entrepreneurs. Compared to other interest charges, the Vuka loan charges are likely to attract more youths to apply for the loan without fear of high interest rates on the loan.
Individuals who are eligible to apply for the Vuka Loan
The Vuka Loan can be applied for by individuals who meet specific eligibility criteria. This includes individual youth applicants who have a verifiable source of income. Youths with an already established business or an existing business that needs to be developed or expanded.
Applicants that are in a partnership or sole proprietorship who have been in business and operated for at least six months prior to applying for the loan, and limited companies that have been in operation for at least one year.
The eligibility requirements are put in place to ensure that applicants have a level of stability viable to repay the loan.
Also Read: Youth Fund Introduces New Loan for Kenyans: How to Qualify
Different loan amounts and the maximum repayment periods.
The maximum amount that one can apply for under the Business Expansion loan is Kshs. 5,000.000.
The repayment period varies depending on the amount borrowed. For Kshs.100,000, an applicant has up to one year to make a payment. Amount between Kshs. 100,000 to Kshs. 300,000 a maximum of two years, 300,000 to 1,000,000 a maximum of three years and amounts from 1,000,000 to 5,000,000 a maximum of 5 years.
Vuka loan security
Conventional securities are required for first-time applicants for loans above Kshs. 100,000 and top -up loans or repeat loans of above kshs.300,000.
Loans secured by chattels require two guarantors to be present. Flexible securities, such as stock, business assets, or guarantees, are required for loans of up to Kshs. 100,000.
Top-up loans after successful repayment of up to Kshs. 300,000 are secured using chattels, stock, livestock, or business assets.
Also Read: How to Apply for NYOTA Program Offering Ksh6,000 Stipends to 90,000 Youth
Documents required for the application of the Vuka loan.
Applicants must submit several documents with the application, including a duly completed application form, a business plan proposal for start-ups, relevant business licenses, copies of relevant business records, and copies of guarantors’ identification cards.
Limited companies applying for the Business expansion loan are required to provide a resolution to borrow, certificate of incorporation, CRT2, company KRA pin and the company tax compliance certificate (TCC) in order to be viable.
The Youth Enterprise Development Fund has its headquarters at Renaissance Corporate Park, Upper Hill, Nairobi and they can be contacted through their email address or telephone number for further information by potential youth entrepreneurs who would like to apply for their loan.
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