Africa-Press – Namibia. The government will offer loans from the National Youth Entrepreneurship Fund (Nyef) at a fixed interest rate of 4%, finance minister Ericah Shafudah has announced.
She says this is a form of directed lending, meaning the government is directing money to young people at a low fixed rate.
This is to make it easier for beneficiaries to repay their loans.
“For the Nyef, directed lending will be structured through the designated conduits and will be capped at a maximum of 4%, thereby reducing financial barriers and supporting equitable access for young entrepreneurs,” Shafudah says.
Traditionally, a loan’s interest rate is based on the prime rate.
Shafudah says the ministry is tasked with mobilising N$500 million for the fund.
A total of N$257 million has been earmarked for the fund for the 2025/26 financial year.
This capital is intended to empower young people to initiate, sustain, and expand business ventures across multiple sectors of the economy.
According to Shafudah, money will be disbursed through the Development Bank of Namibia, the Environmental Investment Fund, and Agribank, with Nampost to join in the future.
The fund will, however, be managed by the Ministry of Finance.
This multi-channel approach is to reduce bottlenecks in processing.
“Reliance on a single channel has historically resulted in delays and restricted access to funding. By diversifying the channels through which resources are disbursed, the Nyef aims to provide more equitable and timely financial support to eligible youth enterprises,” Shafudah says.
Loans will range from N$60 000 to N$200 000.
Earlier this year, Shafudah said the fund would help address the country’s 44.4% youth unemployment rate.
To assess the operational readiness of the fund, the ministry initiated a pilot phase for the project from 1 August to 4 September in response to requests from governors and applicants.
“The purpose of this pilot phase was to evaluate the level of youth engagement in entrepreneurial activities, assess applicants’ writing and planning skill level, and to determine overall readiness for the full roll-out of the fund,” Shafudah says.
Following today’s deadline, governors will submit applications to the ministry, upon which development finance institutions (DFIs) will select beneficiaries.
After the official launch, eligible young people will be able to submit applications to the various DFIs for funding support.
According to an International Labour Organisation (ILO) study on national youth funds in Africa, the Nyef would only be effective alongside other government initiatives to address unemployment.
“Young people are the fastest-growing cohort in many economies, and the sheer number of out-of-school youth cannot be addressed through the implementation of national youth funds alone,” the report reads.
Tanzania’s National Youth Fund (YDF), established in 1994, was amended last year after facing challenges.
One of the challenges was insufficient funding to meet the needs of beneficiaries’ business ventures.
According to the ILO report, there were also challenges in providing beneficiaries with adequate training, affecting their ability to manage and grow their businesses effectively.
However, 89% of the beneficiaries who accessed loans from the YDF managed to create employment for themselves and other young people.
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