Influence of Microfinance Services on Performance of Youth Owned Enterprises in West Pokot Sub-county, Kenya

Abstract

Youth small and medium enterprises have the power to create self-employment opportunities and economically empower young people. But limited access to capital finance from financial institutions and government programmes, regional inequalities and inadequate capacity among the youth in West Pokot Sub-County remains a great challenge. There are also challenges facing youth beneficiaries with capital from financial institutions and government as repayment rates is very low. The purpose of the study was to analyze the effects of microfinance services on growth of youth- owned enterprises, a case study of West Pokot Sub-County. The problem that the study aims to resolve is limited access, inequity and capacity gaps in microfinance services which has led to high unemployment levels, high poverty levels, underdevelopment and low investment among the youth in West Pokot Sub-County. The specific objectives of the study were; to establish the effects of microfinance savings and loan products on performance of youth owned enterprises in West Pokot Sub-County, Kenya; to assess the influence of microfinance group guarantees on performance of youth owned enterprises in West Pokot Sub-county, Kenya; to determine influence of microfinance remittances on performance of youth owned enterprises in West Pokot Sub county, Kenya and to evaluate influence of microfinance training services on performance of youth owned enterprises in West Pokot Sub-county, Kenya. Generally, the study is a source of indepth information to existing and potential youth in micro and small enterprises to alleviate the problems that youth face. It has brought out areas that require support from policy makers in order to enhance youth involvment and participation in micro and small enterprises The study has been informed by the Theory of Performance,Stakeholder Theory,Games Theory of Microfinance and Financial Sustainability Theory. The study adopted a descriptive research design with a target population of 959 youth owned groups. The study also adopted simple random sampling technique with a sample size of 288 respondents. The researcher used questionnaires and interviews as tools of collecting data. SPSS was used for data analysis and findings presented using tables, pie charts amongst many others.In summary, microfinance services (loans, savings, training and advisory services) have significantly influenced growth of youth owned businesses in West Pokot, Kenya. Conversely, Microfinance remittances have not played a significant role in performance of youth owned enterprises in West Pokot Sub-county.