Influence of Youth Enterprise Development Fund Efficacy on the Financial Performance of Youth-Owned Enterprises in Kirinyaga County

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 provision of funds, the youth owned enterprises continue to perform poorly. The main objective of this study was to evaluate the influence of Youth Enterprise Development Fund efficacy on financial performance of youth owned enterprises in Kirinyaga County. Specific objectives were to determine how the, access to credit, loan repayments conditions, and financial literacy, financial planning relates to profitability of youth-initiated enterprises. The significance of the study is to generate knowledge and data on the influence of youth enterprise development, assist the policy makers and program implementers, useful to students in this field of business as the findings will form bankable empirical literature and also bring to the surface the efficacy of YEDF on enhancing performance of youth owned enterprises. Two main theories were used as a base for this study: permanent income theory and portfolio theory. The target population was 525, a sample size of 227 was chosen. Stratified sampling method was used to achieve a representative sample from the chosen geographical areas of the study. Data was analyzed on the SPSS software for both descriptive and inferential statistics. The chisquare test was done at 95% level of confidence and a significance level of 0.005. The findings showed a p-value of 0.11 for variable credit access; for the loan repayment was 0.134 the financial literacy variable had a p-value of 0.0185 and financial planning had a p-value of 0.0165. This indicated a significant association between all the independent and dependent variable. Data presentation was done using charts and tables. The recommendations are that there is need to enhance access to credit by the youth owned enterprises so there is enhanced efficacy on the financial performance of youth enterprises.