Treasury sets up new Sh2bn fund for women, youth

Money Markets

Treasury secretary Henry Rotich (left) with suspended Energy secretary Davis Chirchir at the ministry’s offices in Nairobi March 30, 2015. Mr Chirchir, one of the five ministers who have stepped aside over graft allegations, handed over to Mr Rotich. PHOTO | BILLY MUTAI  NATION MEDIA GROUP

By ALLAN ODHIAMBO, aodhiambo@ke.nationmedia.com

In Summary

• A Sh2 billion affirmative action fund targeting disadvantaged groups has been set up to give loans for periods of up to two years, with a three-month grace period.
• Applicants shall qualify for the fund if they are registered as an institution or a group by the department of Social Services, Co-operatives or the Registrar of Societies.
• Affirmative action groups are required to have a minimum membership of 200 women and to establish a revolving fund account with all applications being made at the constituency level.

A Sh2 billion affirmative action fund targeting disadvantaged groups has been set up to give loans for periods of up to two years, with a three-month grace period.

The Treasury has set rules for the management of the new fund, paving the way for disbursements of the cash to the youth, women, the elderly and disabled persons.

Treasury secretary Henry Rotich said the Affirmative Action Social Development Fund (ASSDF) will be run as a revolving fund and disbursements made annually in equal amounts per constituency.

“The initial capital of the fund shall be two billion and thirty million shillings appropriated by Parliament in the financial year 2014/15,” he said in newly published regulations in the management of the fund.

All disbursements from the fund shall be for specific projects as submitted by a county committee and approved by a special board known as the ASSDF board, which will comprise principal secretaries in charge of National Planning, National Treasury and Social Security.

The board will comprise representatives of people living with disability and for the youth in addition to three other persons nominated by the Treasury secretary.

“All disbursements shall be made through the respective county Affirmative Action Social Development Fund bank accounts maintained by every county,” Mr Rotich said.

Mr Rotich said applicants shall qualify for the fund if they are registered as an institution or a group by the department of Social Services, Co-operatives or the Registrar of Societies.

Affirmative action groups are required to have a minimum membership of 200 women and to establish a revolving fund account with all applications being made at the constituency level.

“It should have a minimum amount of its funding up to Sh300,000 and the revolving fund is to boost the objects of the sacco, co-operative or table banking group for the benefit of women,” he said.

For institutions, it will be mandatory that they be duly registered and have women groups listed within them and also have a minimum funding of up to Sh300,000 to qualify for loans.

“The revolving fund is to boost the objects of the co-operative or institution and should be revolved among women groups residing in that county,” Mr Rotich said.

Any loan granted will attract an interest rate of five per cent, out of which three per cent is to always be retained as savings for the group or sacco and two per cent may be used to offset administrative costs of the group.

“Any person granted a loan by the group or sacco shall be allowed a three-month grace period before commencement of repayment but any loan is payable within two years from the expiry of the grace period,” the minister said