$4.4 million on table for young business people
October 11—Centenary Bank has been designated by the government as the financial institution that will manage the UGX16 billion (about $4.4 million) Youth Venture Capital Fund (YVCF) intended to provide capital for business enterprises run by young Ugandans.
The interest rate for the Fund is 11% per annum (computed on declining-balance basis). A basic requirement in this latest scheme under the Youth Livelihood Programme of the Ministry of Gender, Labour and Social Development (MGLSD), is that one is between the age of 18 and 30 years of age. However, first time borrowers for the revolving fund will given priority.
In a statement, the MGLSD permanent secretary, Pius Bigirimana, said YVCF caters for young people who wish to access funds as individuals, as well as those in smaller groups.
A loan of up to UGX 5 million (nearly $1400) will be made available to individuals or UGX 25 million ($7000) for Partners, Cooperatives, Company or groups.
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’.
Eligible sectors include trade, manufacturing, agro- processing, primary agriculture, fisheries, livestock, health, transport, education, tourism, ICT, construction, printing, and service contractors among others. The loan can be repaid monthly, quarterly or bi-annually depending on cash flow.
Referring to security/collateral, Bigirimana said, “Each borrower must provide two 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 the ability 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.
To date the Youth Livelihood Programme has reached some 144,235 young people who have accessed a UGX85 billion (just under $23 million) through 11,503 groups across the country.
It was introduced by the government as part of solving the twin-problem of unemployment and poverty reduction among the youth in the country.