| dc.description.abstract | Most youth in Kenya when faced with unemployment challenges tend to run small businesses for
economic necessity. However, these youth lack financial capital, which is difficult to access from
formal lending institutions due to lack of sufficient collateral. The Government of Kenya
recognized this predicament among youth and initiated the Youth Enterprise Development Fund
(YEDF) in 2006 to provide fiscal support through flexible and affordable loans. Although this
program is considered a success, most youth have been able to access the funds.
This paper investigated the institutional factors influencing access to credit by youth-owned
enterprises in Embakasi South Constituency, with a particular focus on the YEDF. The Specific
research objectives are to ;- determine whether social status of group members influence access
to YEDF; find out how loan regulatory procedures and conditions influence access to YEDF;
and establish whether the constituency political and youth leadership influences access to YEDF.
The study targeted youth groups who owned macro and small enterprises in Embakasi South
Constituency, and specifically those who had applied for YEDF loans and were either successful
or unsuccessful. Descriptive research design was used to carry out this study. The study used
simple random sampling method to select group applicants and respondents. Purposive sampling
method was used to select key informants from the YEDF offices, financial intermediaries, civil
society organizations, local political leaders and development agencies in the Constituency.
Data was collected using face-to-face interviews, with respondents using self-administered
questionnaires. Field data were coded, entered into SPSS, Microsoft Excel, Word tables and
analyzed using both qualitative and quantitative methods.
The study found that, youth who stayed for longer as a group were more likely to apply and get
YEDF loans than those who formed groups to apply for the loan, Education level among group
members was not a factor that influenced access to YEDF; Moreover, groups that failed to apply
or get YEDF funds due to lack of awareness of the set requirements, and the local political
leadership did not influence access to YEDF as the fund is managed as an independent State
Corporation. However, youth group leadership influenced access to YEDF. Gender
discrimination during group formation was also a factor that influenced access to YEDF. The
YEDF loan conditions and regulatory procedures, such as, long time to respond and disburse
funds, developing business plans, and bureaucracy also posed a challenge to youth applicants.
The study concluded that attributes of social institutions such as gender and age influenced
access to YEDF, although education level was not a major factor, Economic institutions such as
loan contractual conditions and regulations were major factors that influenced access to YEDF
loans. The study finally concluded that political institutions such as youth leadership, to some
extent, influenced access to YEDF loans. The study recommended for further decentralization of
YEDF offices for easy access, holding of sensitization forums to create more awareness of the
fund among youth, establishing mentorship programs to support successful youth applicants on
business management, and conducting independent audits to ensure the money is allocated
accordingly and how is invested by youth groups accordingly. The study also recommends for
further investigation as to why there is less female youth uptake of the Youth Enterprise
Development Fund. | en_US |
