Youth Enterprise Financing Through Public Procurement in Nandi County Government

Abstract

Youth enterprise financing faces many challenges in Kenya and around the globe. The current study seeks to analyze youth owned enterprises’ access to procurement finance and the influence on their delivery on government procurement opportunities. The specific objectives included to; examine characteristics of youth owned enterprises in Nandi County, analyze the nature of contracts run by youth owned enterprises in Nandi County, examine the financing of youth owned enterprises in Nandi County under the AGPO Policy and assess the influence of financing on effectiveness of delivery on contracts by youth owned enterprises the AGPO policy. The theories that underpinned the current study include the theory of financial capability and the resource-based theory. The study employed a descriptive survey design. Target population was 680 respondents drawn from 85 youth enterprises (with AGPO certificates) prequalified by the Nandi County Government between 2017 and 2021. Sample size was 560 respondents. The study adopted both stratified and simple random sampling techniques. The study used both primary data and secondary data. Pre-testing was done in Chesumei Sub-County. The study adopted content validity. Cronbach’s alpha co-efficient was used to test whether the research instruments are reliable. Data collected was analyzed using descriptive statistics and presented using charts and tables. Findings revealed that most of the companies were registered by The Treasury for AGPO, had existed for a period of 3 to 5 years. Majority of the company’s annual turnover was between 500,000 to 1,000,000. On nature of contracts, majority of the respondents had dealt in general supplies. On financing of youth owned enterprises in Nandi County under the AGPO Policy, the study had sought to examine how the respondents financed the contract (s), findings revealed that majority of the respondents financed the contracts through self/family as well as bank loans. Most of the respondents had no access to any form of procurement financing, that is, LSO/LPO financing or invoice discounting neither did they have access to the YEDF. Majority of the respondents did not deliver the goods or services on time and were not paid on time either.. The study concluded that whereas the AGPO policy was good for youth enterprises, access to finance is limited and the performance of the enterprises is stifled by untimely payments. Sensitization programmes and creation of more government procurement packages for the youth would help to improve youth access to government procurement opportunities. The study recommended that the youth owned companies in Nandi be sensitized on the various sources of finance available, that the youth should diversify to more sectors other than general supplies and that the county governments should prioritize payment to the youth enterprises as per the PPAD act (2015).