How not to apply disbursement of Uwezo funds

Welfare policy must balance with rational application if real goals are to be achieved. While it is laudable for the government to channel saved expenditure (Election re-run monies) to build the capacity of youth and women in business, the manner in which it is done is not prudent.

With a history of 10% success rates, continued unemployment and recruiting young people to the culture of corruption and patronage, the funds have been doing more harm than good.

This is largely through the way the funds are disbursed. Guided by the rationale to get money to the grassroots, the government has bequeathed the fund to CDF committees, a lot that haven’t done well with the CDF money in the first place. Then there is the 15 member group thing with balanced gender, registered at the government office and a few pages of typed minutes. Then there is the revolving fund where the group has to show evidence of routine contribution.

The whole criterion looks well intentioned as a welfare policy should be, but irrational if the overall goal is to battle unemployment.

One, what really happens is that today I will call up a group of friends till we are 15. Then if we meet all the criteria, and get the maximum amount (quite unlikely) of Kshs 150,000, we will divide it amongst ourselves and go separate ways with a mere Kshs 33,333. After the grace period some of us will probably be unable to pay back crippling the prospect of others in the future because of debt unworthiness, some of us will have made something of our fortune which will be lauded as a the success story of the whole initiative while some will fall back into the dearth of unemployment waiting for another intervention.

Methinks financing startups is more prudent to growing economies. If such finances can be targeted to startups that not only show potential but have actually a chance of repaying while being able to employ the majority of youth.

I might have a small business either as a sole proprietor or with a manageable number of partners (certainly not 15 incompatibles) I do not qualify to benefit from such a fund which could allow me to expand and employ others.

The prudence of funding such businesses is that they will have a viable record of cash flow which can be assessed to assure repayment, the money will not be fragmented hence less effective as a capital and they actually tackle unemployment. Plus can’t the government just look at the evidence of commercial institutions practically at each other’s neck for a share of the SMEs in the market.

In fact with institutions of higher learning hosting incubation centers, fab labs, i-hub etc with large numbers of small but highly potential startups the work of identifying such business is already done, work which the government wants to be handled by a chief!

It is only a government as wise as the bible man who went on a journey and gave 5 talents to one, 2 talents to another and 1 to the last one that will come back and get 15 talents and not a government that will give 8 talents to all of them and probably not even get any of the talents back.