Factors influencing access to microfinance by youth entrepreneurs in Kenya: a case of Kitui township
Wajero, Patrick O.
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Youth unemployment in Kenya is a serious issue and a key concern of the current Kenya government. Access to finance is a critical factor in developing self-employment opportunities for the youth. Microfinance institutions (MFIs) and Commercial Banks offering microfinance provide access to financial services to low income populations. However, the extent of Kenyan Commercial Banks and MFI service provision to youth has not been thoroughly examined. The study sought to establish how service delivery and delivery channels influence access to microfmance by youth entrepreneurs in Kitui Township; how terms and conditions for microfinance contracts influence youth access to Microfinance in Kitui Township; how provision of Non-financial products influence access to microfinance by youth entrepreneurs in Kitui Township and to establish whether the perception towards youth entrepreneurs by the Microfinance providers influence access to micro finance by youth entrepreneurs in Kitui Township. A descriptive research design was adopted, which explored both the quantitative and qualitative aspects of the survey. Two sets of questionnaires were used, one to the youth entrepreneurs and another to the MFIs. Questions (both open and closed) were adopted for data collection. The randomly selected sample consisted of 75 youth entrepreneurs in Kitui Township and 30 employees of the 10 MFIs and Commercial Banks operating in Kitui Township. The study revealed that youth entrepreneurs are greatly affected by lack of access to microfinance manifested through restrictive terms and conditions, negative perception by the micro finance providers, lack of access to non-financial services and lack of appropriate micro finance products and services. Product diversification by micro finance providers including technology based solutions, improving on the non-financial products and positive information sharing by micro finance lenders are among the major recommendations made in order to enhance youth access to micro finance.