Youth Fund quells fears over state merger plans

The Youth Fund has moved to quell fears among its suppliers that they could suffer losses as the government gears up to merge it with five other financial institutions.

Youth Enterprise Development Fund Chairman Ronald Osumba said the merger would be seamless and the institution was also on course to give loans amounting to Sh1 billion by the end of the current financial year.

MERGER

“We wish to assure our stakeholders that the government has put mechanisms in place to ensure a seamless flow into the new outfit in order to avoid disruption of services.

“The task force working on the merger is still developing the regulatory framework for the merger, which will include public participation,” he said in a statement.

The government plans to merge six financial institutions, including the Youth Fund, to create a giant financial institution.

The other institutions are: the Kenya Industrial Estates, Development Bank of Kenya, Industrial Development Bank of Kenya, Uwezo Fund and Women Enterprise Development Fund.

SERVICES

“We further wish to assure the youth that we will continue to provide services at our head office, regional offices and sub-county offices across the country and that the intended merger will not disenfranchise them in any way.

“We, therefore, encourage them to continue engaging with our officers. Those currently servicing loans are advised to continue doing so,” Mr Osumba added.

The chairman also listed the Fund’s achievements since a new board took office last year.

The previous board was sent home over allegations of corruption.

LOANS

Monthly loans uptakes, said Mr Osumba, increased from Sh20 million in 2016 to the current Sh100 million.

“We expect to raise this uptake further as the reforms we have instituted continue to bear fruit,” he added.

The merger plan was initially mooted in the Jubilee Party manifesto prior to the 2013 General Election.

“It is in line with the parastatal reforms that were recommended by the President’s task force on parastatal reforms in 2013. The move is aimed at increasing efficiency, resolving overlaps and better utilising resources to achieve economies of scale,” the chairman also said.

FUNDS

Mr Osumba listed the measures taken to reinvigorate the Fund since last year.

“We introduced loans for start-ups, agribusiness and for youth in the creative industry. We have also reduced group membership to five for youth interested in group loans. We have further enhanced business expansion loans to Sh5 million,” he said.

His statement also said loan processing was automated, transparency and accountability was enhanced, public participation was emphasised, and partnerships with UBA Bank among other institutions was also established.

“I wish to reiterate the commitment of my board to transform the Fund into a world class, responsive, open, transparent and accountable entity that embraces efficiency and customer focus,” said Mr Osumba.