Search for Savings & Loans
Cheaper Biashara Loans as Uwezo, Youth Fund Scrapped
Cheaper Biashara Loans as Uwezo, Youth Fund Scrapped
See The Best Loans Available in Kenya Today

Cheaper Biashara Loans as Uwezo, Youth Fund Scrapped

Money254 Team
June 17, 2021

The National Treasury has retained the cost of borrowing from the newly-formed Biashara Kenya Fund at 6% making it the cheapest longer-term loan facility in Kenya. 

This is as compared to an average of 12.08% offered by commercial banks in Kenya as of April 2021. This is just about half the cost of credit from traditional lenders. 

When the option of digital lenders - that have risen in popularity over the last few years - is considered, the cost of borrowing for young businesses can be as high as 20 times more when compared to the Biashara Kenya Fund lending rates. 

Treasury CS Ukur Yattani, however, capped the loans accessible to enterprises owned by women, youth and disabled people via the Fund at Ksh2.5 billion. 

Additionally, the CS reduced the maximum loan a single borrower can get through the fund to Ksh2.5 million in the amended Public Finance Management (Biashara Kenya Fund) Regulations 2021 down from Ksh3 million in regulations unveiled in 2020. 

The Biashara Kenya Fund is the culmination of a seven-year process towards merging the three near-similar affirmative action funds; Uwezo Fund, Youth Enterprise Fund (YEF) and the Women Enterprise Fund (WEF). 

A recommendation of the Presidential Task Force on Parastatal Reform Report of 2014, the move is meant to eliminate the duplication of roles, improve efficiency and cut overheads. The fund also seeks to enable the efficient allocation of funds across the sectors that they seek to serve. 


Under Biashara Fund, women, youth and Persons Living with Disabilities will be eligible for loans if they are in a registered group.

Youth- and women-owned businesses are each allocated a 35% share of the loans available through the fund while enterprises owned by persons with disabilities have a 10% share of the funds available. 

Micro-, small- and medium-sized enterprises have been allocated a maximum of 17% of the loans available . 

The remaining 3% has been set aside to cater for the fund’s administrative expenses. 

Loan Terms

The interest payable on the loan has been capped at 6% year on a monthly reducing balance. 

The loans have to be repaid in full within the period stated in the loan agreement. But, in what will be a big boost to individuals starting new businesses or trying to replenish stock or expand, borrowers will have a three-month grace period before being required to commence repaying the loan.  


The following conditions have to be met before funds are disbursed to a successful applicant;

  • All loans from the Fund shall be approved and recorded in the minutes of the Secretariat and a report submitted to the next Oversight Board meeting;
  • All loans from the Fund shall be advanced to the successful applicants and shall be disbursed through the bank account of the successful applicant, or any other appropriate account approved by the Oversight Board;
  • The Administrator of the Fund shall open and maintain loan accounts of all successful applicants and the amount disbursed in each account and the balance thereof, and
  • Such other additional conditions as the Oversight Board may impose on a particularly successful loan applicant.
  • The Administrator shall enter into an agreement with the successful applicant setting out the terms of the loans and loan repayment prior to release of funds through signing of a prescribed form by the Oversight Board.


In the regulations, the fund’s board will be allowed to partner with the private sector - such as microfinance banks and NGOs to boost lending to the three groups. The private sector partners (approved agents) will be lent money at an annual interest rate of 3%. 

On their part, the private sector agents will match the amount given to them by the fund and lend to the three groups the combined kitty at an interest rate of not more than 10%. 

Youth, women and people with disability have historically been marginalised by traditional lenders over what is perceived to be their risk of high default and an inherent lack of collateral. 

The prior funds were set to address this difficulty in accessing credit with the merger poised to further strengthen these affirmative measures to reduce dependency and encourage the growth of small enterprises aspirationally touted to be the ‘backbone of the economy’.  

No items found.

Download the new Money254 App and don’t miss out on the next article.

Join 1.5M Kenyans using Money254 to find better loans, savings accounts, and money tips today.
Get it on Google Play

Learn more about Personal Loans available in Kenya on Money254

Money 254 is a new platform focused on helping you make more out of the money you have. We've created a simple, fast and secure way to find and compare financial products that best match your needs. All of the information shown is from products available at established financial institutions that our team of experts has tirelessly collected.

Instantly search loan products from established providers in Kenya and compare on the terms that matter most to you.
Find the best Personal Loans for me

Don't miss another article - download the new Money254 App Today

Get it on Google Play

Sign up for our newsletter and get weekly money tips to your inbox.

Get updates from the Money254 team on financial news and new Money254 features.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.