Loan Repayment Terms And Performance Of Youth Enterprise Development Fund In Kisumu Central Sub-County, Kenya

Abstract

Youth Enterprise Development Fund is a creation by the government of Kenya, gazetted in the year 2006 and transformed into a state cooperation in the year 2007. The fund is meant for economic empowerment as well as social transformation of the youth in the whole country. This was a strategic plan by the government of the day to engage the youth in a productive manner in the face of youth unemployment. The Youth Enterprise Development Fund has had its fair share of success yet challenges abound. Key among them is the dwindling repayment of the loan facility advanced to the youth. In fact, the repayment has averaged 26% in Kisumu Central Sub-county just like elsewhere in the country. The current study probed the impact of the terms of loan repayment towards the triumphs of youth enterprise development fund. The specific focus included credit control, collateral availability, as well as client appraisal. The study utilized saturation-sampling technique to sample 45 respondents within Kisumu central sub-county. A questionnaire was adopted to gather primary data. Data was then analyzed using inferential (correlation & regression) as well as descriptive statistics of mode and median. A moderate positive correlation (R = .459; p = .002) emerged between credit control and performance while it was strong between availability of collateral (R = .587; p < .001) client appraisal (R = .699; p < .001) and performance which were statistically significant (p < .05). The combined loan terms explain up to 53.6% (R2 = .536) of variance in performance of YEDF with only the coefficient of client appraisal (B = 0.815; p = 0.001) is statistically conspicuous. The research concludes a moderate practice of credit control; collateral availability should be greatly considered while client appraisal should be greatly considered. Moreover, it is important that great focus and emphasis is laid on meticulous client appraisal to enhance the performance of YEDF. It is hoped that management of youth enterprise development fund who wants to recover loan facility advanced to the youth will use the study. Government to formulate relevant policies to make it possible to recover the loans could also utilize the study. Scholars could have a foundation enabling them use the outcome of this research as a literature material for subsequent research and arguments.