Factors influencing uptake of credit by Kenyan youth in Nairobi county

Abstract

The study sought to investigate factors influencing uptake of credit by youths in Nairobi County. Specific objectives were; to establish the influence of credit terms on the uptake of credit by youth in Nairobi County, to determine the extent to which awareness of credit facilities influences uptake of credit by Nairobi youth and to find out the influence of entrepreneurial skills in credit uptake by youths in Nairobi County. The study targeted all the youth in Nairobi aged between 18 and 35 years numbering 1,462,803 out of which a sample size 381, was selected. Respondents were drawn from all the four administrative districts namely Nairobi West, Nairobi East, Nairobi North and West lands. Primary data was collected using structured questionnaires administered by the researcher. The study reviewed literature on the factors influencing uptake of credit. Data was analyzed by use of quantitative methods, which included the uses of descriptive statistics. The regression results of the study revealed that, holding other variables constant, the credit terms, the business and entrepreneurial skills and the awareness of the youths account for 82.3% of the variability in the amount of credits taken by the youths. Also, the regression model developed illustrates clearly that, the credit terms attached to the loans has an inverse relationship with the youth’s credit uptake. The findings of this study will also create awareness to policy makers on the factors that need to be looked into to ensure youth are more effective in contributing to Gross domestic product of the country. Researchers will find the study useful as it will give highlights for further research and also contribute to new knowledge. The study will facilitate individual researchers to identify gaps in the current research work and carry out research in those areas.