Youth enterprise development fund: A study of its viability as an empowerment strategy for youth entrepreneurs in Ruiru division, Thika district

Abstract

The focus of this study was to establish the viability of the Youth Enterprise Fund (YEDF) as an Empowerment tool for youth Entrepreneurs in the informal sector. The study was conducted in Ruiru Division, Thika District. The study targeted young entrepreneurs who have benefited from the YEDF through the financial intermediaries and the constituency Youth Enterprise scheme(C- YES). The research reviewed relevant literature by various researchers and Institutions on the role of micro-credit in Enterprise development, the characteristic of Young entrepreneurs, the concept of Empowerment and the challenges facing Yong Entrepreneurs in the Informal Sector. The theoretical framework was based on the achievement/Motivation theory and the Grameen Bank Model. The study adopted a qualitative and quantitative approach and utilized both primary and secondary data. The primary data was collected using personal interviews and Key Informants data collected methods, while secondary data was gathered through desk research reviews of documents related to the study. The main findings of the study revealed that: The majority of the Youth entrepreneurs seeking the loan stay alone accounting for 68% of the respondents. Most of them have secondary education (45.8%). Nearly 52% of the respondents are married. Most of the young entrepreneurs have other sources of income apart from the business (61%) to cushion themselves from uncertainties encountered in the informal sector. The study established that the amount of loan given is minimal with 42% getting twenty thousand, 26 less than twenty thousand. The procedure followed to access the loan took between one month (18%) and six months (7.2%) which the respondent said was too long (73.5%). Majority of respondent (82%) got money from micro-finance intermediaries (rnfis) and some form of collateral was required. Most of the respondents had some basic training in running business and majority felt they need more training in Business management (81.9%) Business performance had improved after the loan and the respondents reported they were making profit (88%) and their livelihood had improved (53%) after getting the loan. The study recommends that for the YEDF to be more effective in empowering Young entrepreneurs the informal sector, more emphasis should be put in giving more training in entrepreneurship skills to Youth before and after accessing the loan. The amount given should be increased and pegged on the Youth Businesses funds proposal. The Government can partner with other stakeholder to increase the loans for the young entrepreneurs and address their Training needs. Systematic Monitoring and Evaluation on the performance of the Youth Businesses by the Youth Board and the Ministry of Youth and Sports is weak and this needs to be strengthened. The research further recommends that a Rapid needs assessment on the YEDF can be carried to establish its sustainability in the long term.