Youth-owned businesses will be handed a seven-year tax break, with graduates allowed a four-year grace period before payment of their study loans, in grand plans by the Building Bridges Initiative (BBI) to address the problems of young people.
The report, launched on Wednesday by President Uhuru Kenyatta and ODM leader Raila Odinga, proposes an amendment to The Higher Education Loans Board Act 1995 (No. 33 of 1995) to give loanees a grace period of four years from the date of completion of their studies before they can commence repayment of loans advanced to them.
Thousands of Kenyans whose education was funded through Helb loans have in the past seen their facilities accumulate high penalties since they start attracting interest immediately, irrespective of their employment status.
Thousands of former beneficiaries have also been listed with credit reference bureaus (CRBs), limiting their chances of accessing loans from financial institutions.
In another proposal, Helb loans will start attracting an interest when the beneficiary starts earning an income. A high unemployment rate among graduates has been cited as a main cause for non-payment of the loans.
“The proposed amendments further exempt loanees without a source of income from paying interest on the loans advanced to them until such time that the loanees start earning an income,” the report reads.
The proposal to delay the repayment of loans may, however, roll back gains made by Helb in loans recovery. Former beneficiaries still owe more than Sh6.5 billion in non-performing loans.
Besides the seven-year tax break – a huge enticement to the youth planning to go into business – the BBI team also wants the establishment of business incubation centres to provide business advisory services, which includes access to capital and government contracts.
“Most young people speaking to the steering committee during the validation period exhibited frustration with the job market. They complained of having met the educational goals that they were told would allow them to get employment, but when they applied for jobs, there were persistent demands for them to have experience, among other unattainable requirements for a new entrant in the job market,” says the BBI report.Advertisement
The youth, said the team led by Garissa Senator Yusuf Haji, called for entry-level requirements for jobs in the private and public sector to be made more accessible for those joining the work force.
The BBI team wants the Micro and Small Enterprises Act, 2012, amended, to task the authority to register and certify businesses owned by young people, as well as those by women and persons with disabilities.
The report also wants the cost of doing business and impediments to starting enterprises addressed, as well as promotion of the culture of saving among Kenyans.
The report also called for the recognition of the home office as a place of business — a huge turnaround that saw many people working from home during the Covid-19 pandemic, and which the committee now wants extended.
The report has also proposed the establishment of a youth commission to advise national and county governments on the design, implementation and evaluation of pro-youth policies, as well as ensure mainstreaming the youth perspective in planning and decision-making.
The commission shall have seven members, four of whom must be youth, with equal representation of both genders, and will advance the participation of the youth in all public and private life.
It will also facilitate generational mentorship and integration of African traditional values with contemporary youth lifestyles while promoting “preservation and dissemination of African morals, traditions and cultures among the young people.”
The report also wants Huduma Centres to have advice desks manned by business development experts to help young people start and operate businesses.
It also wants work readiness, entrepreneurship and financial literacy training for the youth using classroom volunteers from the age of 12 all the way to the end of university.
The BBI report also suggests changes to current teacher recruitment policies in order to discourage local hiring and staffing of teachers in order to enhance integration of Kenyan communities and minimise ethnic antagonism and competition.
The report also recommends a review of admission policies to schools to give them a national outlook.
The Teachers Service Commission started the delocalisation policy a few years ago. However, teachers’ unions have been opposed to it arguing that it is inconvenient to teachers and contributes to the break-up of their families.