FACTORS AFFECTING THE REPAYMENT OF CONSTITUENCY YOUTH ENTERPRISE SCHEME LOAN IN KIRINYAGA CENTRAL DISTRICT CENTRAL PROVINCE KENYA.

Abstract

The Youth Enterprise Development Fund was conceived by the Kenyan Government in June 2006 as one of the strategies of addressing youth unemployment. The fund provides a means of livelihood, employment and income to alleviate poverty conditions among the Kenyan youths and hence a road map towards .achieving the Millennium Development Goals. However, loan default remains a challenge.

This study sought to assess the factors affecting the repayment of Constituency Youth Enterprise Scheme in Kirinyaga Central District. The study aimed at achieving the following specific objectives in Kirinyaga Central District; To find out how availability of resources affect the repayment of Constituency Youth Enterprise Scheme Loan (C- YES) in Kirinyaga Central District; to determine how time taken between application and receiving of funds affect the repayment of constituency Youth Enterprise Scheme Loan (C- YES) in Kirinyaga Central District; to determine how amount of loan given affect the repayment of Constituency Youth Enterprise Scheme Loan (C- YES) in Kirinyaga Central District; to determine how employees training influences the repayment of Constituency Youth Enterprise Scheme Loan (C- YES) in Kirinyaga Central District; to find out how follow-up measures influences the repayment of Constituency Youth Enterprise Scheme Loan (C-YES) in Kirinyaga Central District.

The findings of the study would be significant to the management of YEDF in designing support mechanisms for enhancing youth development in entrepreneurship. The study adopted survey research design. It employed both stratified sampling and simple random sampling. The data collection instrument was a questionnaire that was self-administered with the help of research assistants. The collected data was analyzed by the use of Statistical Package for Social Sciences (SPSS) and was presented by use of frequency tables.

The main findings of the study were that there are no adequate resources to follow up on Constituency Youth Enterprise Scheme Loan (C-YES) defaulters. It took the youths above 5 months after application to receive the funds which adversely affected their businesses. The amount of loan given is also too little to start a business. Employees lacked adequate skills to carry out duties related to micro-credit. The main recommendations from the study were that adequate resources should be provided to enable smooth monitoring of all funded youth groups, fast processing of cheques, employee training and setting up of legal framework on how to handle defaulters.

The researcher suggests that further research be done on Investigate the sustainability of Constituency Youth Enterprise Scheme in Kenya. Also, the impact of the Youth Enterprise Development Fund on the lives of Kenyan youths and a similar study can also be carried out in other districts in the country to establish whether the findings are similar to those generated by this study.