About YERF Standard Loan

YERF Standard loan is made for all eswatini youth from the ages of 18 to 35 who wish to start or grow their businesses. It is enshrined in the mandate of Youth Enterprise Fund that the seed capital loans would be collateral free. The beneficiaries are not be expected to contribute neither up front deposit nor collateral. This is aimed at maximising access to credit by youth entrepreneurs.

Our Funding Model

The YERF will be disbursing funds through an Intermediary Finance Institution and thus has developed a project funding value chain which clarifies the roles and responsibilities between YERF and the Intermediary. The roles and responsibilities can be summarised as follows:

  • Project Application


  • Early Review


  • Appraisal


  • Approval


  • Contracting


  • Disbursement


  • Portfolio Management


  • M&E


  • Close Out


  • Surveillance


1Application Process

The applicant fills in the forms providing information which shall among others include:

  • Information about the applicant(s)
  • 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
  • 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 in the last page of the application form.

The following attachments shall be necessary to accompany the submission of the application form:

  • 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 right (Chief’s Letter, Title Deed, Lease Agreement, etc.)
  • Business Plan (Include relevant CV)
  • 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.
3Loan Appraisal Process

The appraisal process shall be as follows:

  • The application form together with other loan attachments are submitted to YERF offices.
  • YERF conducts pre-screening which is a feasibility analysis to ensure feasibility and completeness.
  • Feedback is sent to applicants. Those that are deferred shall be given reasons for non-approval and they will be assisted to improve them and re-submit
  • Upon completion, successful applications are forwarded to IDCE for full appraisal.
  • Upon completion of appraisal, loan is recommended by IDCE to YERF for approval of the requested amount.
  • YERF also reviews loan for approval. Upon final approval, a letter of offer is issued to the applicant and the loan is returned to IDCE for further processing and subsequent signing of loan agreement.
  • Upon completion of the security documentation, the client is handed over to the mentorship and coaching service provider to monitor and authorize disbursement upon fulfillment of all necessary documentation.

The process between receipts of loan applications to approval stage is expected to take about one (1) month.

4Disbursement Process

The disbursement of funds shall follow the process below:

  • The successful applicants shall undergo and 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 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

1Lending Limits

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 - E5,000.00 to E50,000.00
  • Companies - E5,000.00 to E100,000.00
  • Cooperatives - E5,000.00 to E150,000.00
2Term of Loans

The term of loans 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 to the production cycle of the businesses. The production cycle will differ from one business to another. Loan terms are as follows:

  • Seasonal term - 12 Months
  • Short term - 24 Months
  • Medium term - 36 Months
3Loan Interest rates

The fund will endeavor to price loans below market rate due to developmental mandate. Interest rates shall be categorized into the following three market segments subject to risk assessment.

  • Market 1 - Prime +2%
  • Market 2 - Prime +1%
  • Market 3 - Prime +0%

*Prime rate is taken from the Central Bank of Eswatini

4Market Segmentation

YERF market segmentation is as follows:

Variables Market 1 Market 2 Market 3
Level of Enterprise Development Advanced Intermediary Basic
Skill Posses own skills or capacity to acquire Posses some own skill or capacity to acquire Posses minimal or no skill at all
Institutional Capacity Good capacity to deliver Moderate capacity to deliver Poor institutional capacity
5Coaching & Mentorship

Post funding, coaching and mentorship of the young entrepreneurs on an ongoing basis is one of the fundamental prerequisites to ensure 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.