Kween youth can not access funds due to lack of collateral security

Stephen Kiplangat, a resident of Kween district, says the youth in his home area cannot access the government youth venture capital fund because the security required for the loans are items of wealth they don't have. The government's partner banks are asking for land titles or evidence that borrowers own houses etc that rural youth say are beyond their means.

Starting July 2012, the government of Uganda in partnership with Stanbic, DFCU and Centenary banks made available a Shs 25b for enterprising youths around the country to borrow from and grow their businesses. In theory one could borrow up to ten times the value of their business and expand it. In practice however as the Kween example illustrates, these funds remain out of reach to the targeted demographic.

It is worth noting that this so called venture capital fund runs on a peculiar model. Elsewhere in the world, venture capital funds invest in start-up businesses they evaluate as viable rather than lend their owners money. That way, entrepreneurs with good ideas but no collateral for borrowing can have access to growth funding anyway and the venture capital fund benefits by owning a part of the business and sharing in its future profits (or losses).

- June 2, 2014
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