Influence Of Youth Enterprise Development Fund On The Performance Of Youth-Run Businesses In Bumula Sub County, Bungoma County
Abstract
Youth-Run-Enterprises (YRBs) are defined as businesses owned and run by people aged below
35 years. The performance of such enterprises continues to attract a lot of policy and scholarly
attention. However, empirical evidence on the determinants of performance of youth run
enterprises is limited. This limits policy initiatives aimed at improving the performance of youth
run enterprises. This study was conducted to assess the influence of Youth Enterprise
Development Fund (YEDF) on the performance of Youth-run Enterprises (YRBs) in Bumula
District, Bungoma County, Kenya. The objectives of the study were to determine the influence of
access to credit, to establish the influence of capacity building, to examine the influence of market
dynamics and to investigate the influence of monitoring and evaluation on the performance of
youth-run enterprises in Bumula District. The study employed a cross-sectional survey design.
The target population for the study was 2,800 youths belonging to 140 youth groups. The sample
size was computed using Gay’s formula where a sample of 280 respondents was deemed adequate
for the study. The respondents were selected using simple random and purposive sampling. Data
was collected using structured questionnaires administered to the respondents. Data was analyzed
using Statistical Package for Social Scientists (SPSS) version 17 and presented in frequency,
percentage tables and means calculated. The study found out that despite the fact that YEDF
could be a preferred source of funding among the youths, accessing it remained a great challenge.
It was also discovered that time taken to process loan applications is very long; the speed of
processing applications is not satisfactory thus all planned activities are jeopardized. Most youth
have not been properly informed on how this fund can be accessed. The majority of the
respondents at 67.4% felt that the interest rate is not favourable for the YRBs to thrive. High
interest rates present a big challenge for entrepreneurs who to access credit due to uncertainties
experienced while running businesses and enterprises. The loan amount offered by YEDF is
limited and youth groups are required to restrict their budgets within the upper limits. This means
that the YRBs cannot make great plans and ventures. New initiatives cannot take place due to
limited funds. Time period given before repayment, also referred to as ‘grace period’ is not
adequate. The majority of the youth officials indicated the period was not very adequate with
70.4% observing that time or period provided to loanees before commencing loan repayment is
important especially to the newly established enterprises. The study found out that despite the fact
that YEDF could be a preferred source of funding among the youths, accessing it remained a great
challenge. Most youth have not been properly informed on how this fund can be accessed and at
the same time, projects funded by the funds have not been properly managed and hence low
repayment rates. It can be deduced that majority of the respondents have little knowledge on
developing business plans and this affects the performance of the YRBs. Majority of youth groups
try to develop business plans, which is a challenge to many people. There is need for promoting
networking among various institutions working in the area of promoting Youth Enterprise
Development Fund. This networking should be based on a careful consideration of the
competencies and capacities of participating partners. 46.0% closely associated the support with
the performance of YRBs indicating that support from stakeholders is minimal. It can be
concluded that routine visits by fund officers has an effect on the performance of the YRBs with
57.3%. Fund Officers rarely visit funded groups to assess their progress. Majority of the
respondents felt regular progress assessments by the Fund Officers was key towards ensuring that
proper guidance and technical support would be given on time when necessary
Projects funded by the funds have not been properly managed and hence low repayment rates.
The fund has staffing problem and hence lacks proper monitoring and capacity building. The fund
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