Determinants of Youth’s Enterprise Development Fund Loan Repayment in Kisumu County, Kenya

Abstract

Despite unemployment rate of 55% in Kisumu County, loan repayment rate from the youth enterprise development fund is below 30% yet proper loan repayment can improve loan disbursement from the youth enterprise development fund and hence address youth unemployment in the County. A study on the determinants of loan repayment was therefore necessary since no study has been done on the subject with five distinct variables together namely: business skills, external factors, borrower characteristics, business location, and terms of repayment. Therefore, the current research study investigated determinants of youth’s enterprise development fund loan repayment in Kisumu County. The study employed cross-section design with a population of 7 responders. Data was collected using questionnaires which were administered by the researcher. Data analysis was then done using frequencies and percentages as well as mean and standard deviation. Content analysis was also used as part of the analysis. The study established that business skills (3.450, 0.517), borrower characteristics (3.374, 0.472), and terms of loan repayment (3.692, 0.155) representing mean and standard deviation for each variable highly determined loan repayment within the youth enterprise development fund. Additionally, external factors had a mean of 1.058 and a standard deviation of 0.536 meaning that it has lowly determined loan repayment within the youth enterprise development fund. Business location had a mean of 2.640 and a standard deviation of 0.420 meaning that it moderately determined loan repayment at the youth enterprise development fund in Kisumu County. The study recommended that emphasis should be put on the variables that contribute to loan repayment