KCCA to meet finance minister over youth fund

By Taddeo Bwambale

The Kampala Capital City Authority (KCCA) has set up a committee to meet finance minister, Maria Kiwanuka over new guidelines for accessing the youth fund run by the Authority.

The Authority councilors last week described the new conditions set by the Government as 'unfair' and called for a review of the terms.

"As leaders, we have sensitised the youth and prepared the successful ones to receive the start-up funds. To change the conditions at this stage will be very dangerous to us. Telling them now to go to commercial banks and start the process afresh is unfair to them," said Nakawa division councilor, Apollo Mugume.

"It seems the Government is only interested in giving business to commercial banks. If we are really concerned about getting youth out of poverty, such stringent conditions should not arise," said Shifra Lukwago, the Kawempe division councilor.

"Since the youth have incurred many costs while applying for the funds, KCCA should incur the interest to allow the youth to get interest-free loans," Aidah Nakuya, a youth councilor proposed.

 "The interest is too high yet the people targeted by the initiative are very poor," argued Baker Serwamba, the councilor for Makindye.

The councilors also proposed entrusting the youth fund to a reliable microfinance institution instead of commercial banks as directed by the Government.

The Government announced this week that the conditions for accessing the sh3.3b KCCA youth fund will be the same as those for youth venture capital fund managed by Dfcu, Stanbic and Centenary banks.

"We received a directive from the Government that the management of the fund should be in line with the national policy and KCCA cannot divert from the policy," the KCCA executive director, Jennifer Musisi said.

Last month, KCCA cleared 432 youth groups to get interest-free loans with a one year grace period. The new conditions mean the youth will received the money with 15% interest and the grace period will depend on the nature of the business.

With barely a week to the end of the financial year, KCCA risks losing the sh3.3b to the Government if the money is not spent by June 30.

The councilors agreed that KCCA should establish a special account on which to allocate the money so that it is not returned to the Consolidated Fund.

During the stormy meeting, the councilors were thrown into frenzy after it emerged that part of the youth fund worth over sh200m had already been spent under the programme.

They wondered why sh3.29b was earmarked for direct disbursement to the youth, yet the budget showed sh3.54b.KCCA's director for revenue, Harriet Mudondo said part of the money was spent on administrative costs and promised to provide a detailed report.

The committee comprising Kampala MPs, officials from KCCA and the Resident City Commissioner are expected to meet the minister on Monday to resolve the matter.