Uhuru wants banks to fund youth start-up loans and training
Banks could soon contribute funds for technical training and low-cost loans to finance graduate artisans’ start-ups if President Uhuru Kenyatta has his way.
Speaking in Nairobi at the KCB Group‘s 2jiajiri graduation ceremony for 10,000 youth, President Kenyatta said yesterday other banks would be required to emulate KCB Group by setting aside funds for youth empowerment programmes.
He said the more than 40 Kenyan banks would be required to reach a consensus on the social development contributions as well as be required to provide low-priced loans to the youth to start own businesses.
“It cannot be that we protect their (banks’) interests but they do not help us develop and grow this country by extending affordable loans in a clear manner. Let us help the youth acquire skills, expose them via internships and sponsor them to start businesses,” he said.
This could be a departure from the norm where private businesses make own decisions on how to spend their profits from funding expansion, paying dividends while reserving part of their profits for corporate social responsibility projects.
The President’s pronouncement would, however, require to be backed by legal amendments to make it enforceable. There is currently no industry that is required by law to channel any portion of its profit to such projects.
Kenyan banks made Sh87.8 billion profit in the first nine months of this year, staying on course to surpass the Sh96 billion full-year profit for 2017.
KCB chief executive Joshua Oigara said the lender would spend Sh50 billion in the next five years to youth-owned businesses as loans at an interest rate of nine per cent.
“In the past 11 months, we have loaned Sh18 billion to medium, small and micro-enterprises who have in turn created jobs for Kenyans. Under 2jiajiri programme, 23,000 youth have been trained, leading to the creation of 2,000 successful businesses,” he said.
President Uhuru Kenyatta (left) with Governor Mike Sonko and Senator Johnson Sakaja (centre) at the KCB 2jiajiri event yesterday.