How To Apply for Youth Enterprise Revolving Fund (YERF) 2022
The Youth Enterprise Revolving Fund (YERF) is controlled under the Federal Ministry of sports and Culture & Youth Affairs, application for 2022 is in progress and it is for Eswatini Entrepreneurs only
The Youth Enterprise Revolving Fund (YERF) is a Parastatal under the Ministry of Sports Culture & Youth Affairs established by the Government of the Kingdom of Eswatini.
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Filling of Application forms
The applicant fills in the forms providing information which shall among others include:
Information about the applicant(s)
The form with all the attachments is submitted to The Fund offices, ENYC Offices, or left at Inkhundla Centre where it shall be collected
Applicants should ensure that before submission, attachments are included as guided in the requirements checklist found on the last page of the application form.
The form is taken to Umphakatsi or Zone Leader for vetting they append their signature and stamp the form
The form is taken for further vetting at Inkhundla through signature and stamp
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Attachments
The following attachments shall be necessary to accompany the submission of the application form:
Market Contract/Letter of intent as proof of market
Trading Licenses (where applicable)
The applications received shall not be interpreted as deserving funding.
Only relevant requirements shall be attached by the applicants i.e. not all the above requirements are applicable to all applications.
Certified copy of ID
Certified copy of Certificate of Incorporation (for a registered company)
Certified copy of Form J
Certified copy of Memorandum & Articles of Association
Premises / Land rights (Chief’s Letter, Title Deed, Lease Agreement, etc.)
Business Plan (Include relevant CV)
Loan Appraisal Process
The appraisal process shall be as follows:
Stage 1 –
YERF pre-screening to ensure; Compliance, Eligibility, and Feasibility.
Stage 2 –
Pitch up for qualifying applicants to present their business proposals.
Stage3 –
Qualifying applications are referred to the Intermediary for viability analysis including site visits.
Stage 4 –
Viable applications are recommended to YERF by the Intermediary, where the Board of Directors shall approve projects deserving funding.
Stage 5 –
Feedback is sent to applicants. Those that are not successful shall be given reasons for non-approval and they will be assisted to improve them and re-submit in the next cycle.
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The process from receipts of loan applications to the approval stage is expected to take about one (1) month.
Funding
The disbursement of funds shall follow the process below:
The successful applicants shall undergo intense business training
Those that have previously undergone training from a reputable institution shall be exempted from the training.
The successful applicants shall proceed to sign loan agreements
All applicants will be expected to open bank accounts for their businesses.
A mentor/advisor shall be assigned to the applicants before the disbursement of funds.
The mentor shall also be co-signatories to procurement or expenditure requisitions.
Disbursements shall be made direct to suppliers as much as possible.
Lending Terms and Conditions
Size of Loans
There shall be different lending limits for Individuals, companies, and cooperatives. Deviation from these limits shall be at the discretion of the youth fund in consultation with the intermediary.
The following maximum lending limits shall be observed:
Individuals – E50,000.00
Companies – E100,000.00
Cooperatives – E150,000.00
Loan terms to be provided
Seasonal term – 12 Months
Short term – 24 Months
Medium-term – 36 Months
Interest rates
The fund will endeavor to price loans below the market rate due to its developmental mandate.
Interest rates shall be categorized into the following three market segments subject to risk assessment.
Market 1 – Prime +2% = 12.0%
Market 2 – Prime +1% = 11.0%
Market 3 – Prime +0% = 10.0%
Currently the Prime rate is 10.0%
Market Segmentation
There shall be different lending limits for Individuals, companies, and cooperatives. Deviation from these limits shall be at the discretion of the youth fund in consultation with the intermediary.
The following maximum lending limits shall be observed:
Variables Micro Very small Small Medium
Turnover (E) 2,500 60,000 150,000 600,000
No. of Employees 1 – 4, 5 – 9, 10 – 49, 50 – 200
Term of Loans
While the fund does not have an appetite for long-term lending, it still remains a fact that development finance in its nature is more inclined toward long-term lending.
There is therefore a need to balance the need to maintain good liquidity as well as address the needs of the project for its success.
The term of loans shall therefore range between 12 – 36 months, subject to the size of the project as well as the nature of the project cycle.
Loan repayments shall be scheduled in accordance with the production cycle of the businesses.
The production cycle will differ from one business to another.
Deposit Contribution
It is enshrined in the mandate of the Youth Enterprise Fund that the seed capital loans would be collateral-free.
The beneficiaries shall not be expected to contribute either upfront deposit or collateral.
This is aimed at maximizing access to credit by youth entrepreneurs.
Coaching & Mentorship
Post funding, coaching, and mentorship of the young entrepreneurs on an ongoing basis are some of the fundamental prerequisites to ensure the performance and repayability of loans by the youth.
The youth is often still immature and lacks experience in business management, therefore the fund will facilitate mentorship and coaching through local business development service providers.
How To Apply for Youth Enterprise Revolving Fund (YERF) 2022