Factors Influencing Repayment Of Constituency Youth Enterprise Scheme Loans(C-YES): A Case Of Kitui Central Constituency In Kitui County, Kenya

Abstract

Despite the continued increase in financial support to youth led enterprises by the government through youth enterprise development fund, there is still a persistent failure and ultimate collapse of Youth Projects in Kenya. Current reports for Kitui central constituency states that repayment of C-yes loans stands at 45% which is the lowest compared to other constituencies in the county. This poses a serious risk of extinction yet it was meant to be a revolving fund to help create jobs and help youths run their own projects responsibly and sustainably. This research study therefore seeks to establish the causes of the high rates of default in the repayment of C-yes funded loans among youth groups in Kitui central constituency, Kitui County, Kenya. Relevant literature was reviewed while focusing on the background of the youth fund. The specific objectives was to establish the influence of enterprise growth on repayment of YEDF loans among C-yes funded youth groups in Kitui central constituency, to assess the influence of youth focused self employment promoting policy on repayment of YEDF loans among the C-yes funded youth groups in Kitui central constituency, to establish the influence of group leadership on repayment of YEDF loans among C-yes funded youth groups in Kitui central constituency and to evaluate the influence of the level of education on repayment of YEDF loans among the C-yes funded youth groups in Kitui central constituency. Kitui central constituency formed the geographical scope of the study where target population was the officials of the youth groups who benefited from the C-yes loans. This study was conducted using a descriptive survey design on a sample of 30 youth groups out of the 99 groups who benefited from the C-yes loans in the previous three years in the constituency. In data collection, structured questionnaire was developed and utilized in the study. Data collected was analyzed using both descriptive and inferential statistics. This research study is hoped to inform government policy especially regarding youth enterprise development fund on how to enhance and instill proper controls and discipline to ensure accurate and total repayment of C-yes loans for sustainability of the fund.The study revealed that the factors influencing the repayment of Cyes loans among Youth groups includes lack of enterprise growth, lack of Youth focused self employment promoting policy, poor group leadership and low education levels among youth group members.Inview of the research findings the researcher recommended that the government should establish more commercial linkages for youth enterprises so that they are able to realize more profits and further a policy should be put in place to award a portion of government tenders towards youth owned enterprises. The government should form partnerships with other key stakeholders involved in youth development progammes so that they can enhance youth owned enterprises through skills training like entrepreneurship, group dynamics, mentorship and business incubation . The researcher further recommended the need for the repayment periods for the loans to be increased to enable the youth groups to accumulate enough funds for repayment. A public private partnership approach to boost youth owned enterprises should be put in place to come up with strategies like building of sheds to retail and market both products and services. Besides the youths should embrace modern marketing and selling techniques which involve use of information technology for example e-marketing. This will enable them market their products and services competitively locally and globally.