Influence of Access to Credit on the Financial Performance of Youth-Owned Enterprises in Kirinyaga County in Kenya

Abstract

Youth-development funds play a great role in availing resources to the youth so that they can start their own enterprises with an aim of being self-reliant. The government of Kenya through the youth enterprise fund finances viable youth enterprises in the country. Despite the effort made by the government in the provision of funds, the youth-owned enterprises continue to perform poorly. The main objective of this study is to evaluate the influence of access to Youth Enterprise Development Funds on the financial performance of youth-owned enterprises in Kirinyaga County. The specific objectives are to determine how the type of enterprise, ease of accessing funds, credit offered, and interest rate relates to the profitability of youth-initiated enterprises. The significance of the study is to generate knowledge and information on the influence of youth enterprise development, assist the policy makers, and program implementers, which is useful to students in this field of business as the findings will form bankable empirical literature. This study is based on permanent income theory. The target population was 525, and a sample of 225 was chosen using a stratified sampling method to achieve a representative sample from the chosen geographical areas of the study. Data were analyzed on the SPSS software for both descriptive and inferential statistics. The findings showed a p-value of 0.0232 for the type of enterprises, 0.0243 for the ease of accessing funds, 0.0214 for the credit offered, and 0.0244 for the interest rate. This showed that the relationship between the dependent and independent variables was significant. The presentation was undertaken using frequency tables and charts. The recommendations are that there is a need for enhancement of access to credit to youth-owned enterprises so that they can become more profitable.

Influence of Access to Credit on the