Factors influencing repayment of youth enterprise development fund: a case of funded youth groups in Likoni Constituency, Mombasa County

The youth aged between 15 to 34 years account for about 37 per cent of the Kenyan population (KNBS 2009). This implies that about four-fifths of Kenya's population is less than 35 years old. In Kenya, unemployment is one of the most daunting economic challenges facing the youth in Kenya. It is one of the major vices impinging on the youth in Kenya (KNYP 2006). Statistics indicate that the magnitude of the unemployment problem is left by the youth with approximately 38% of the youth in Kenya neither in school or work. Approximately 67% of the unempleyed are young people below the age of 30 years while 45% of the unemployed are below 24 years of age. In addition 90% of the unemployed youth do not have appropriate vocational or professional training, which further limits their chances of fully participating in the labor market. In its attempt to address the increasing employment among the Youth in Kenya, the Government of Kenya mooted the idea of Youth Enterprise Development Fund. There has been growing recognition of the important role small and medium enterprises (SMEs) play in economic development. They are often described as efficient and prolific job creators, the seeds of big businesses and the fuel of national economic engines. However, the revolving fund that was meant to help Kenyan Youth start businesses is now chalking up bad debt, causing fear of a looming liquidity crisis that could also rob them support from financiers. The average National repayment rate ofC-YES stands at mere 35.22%. In Likoni the repayment rate stands at a dismal rate of 9.28%. The purpose of this study therefore was to identify factors that influence repayment of YEDF loan disbursed to funded Youth groups. This study examined related literature on issues influencing repayment of YEDF loan and further presented a theoretical review of theories related to factors influencing repayment of YEDF. A conceptual framework with regard to objectives of the study was later developed in this chapter. The research design adopted was a descriptive. The Target population of this study was comprised of the 56 funded youth groups in Likoni Constituency. Purposive sampling was employed and all the 56 funded youth groups were interviewed. A structured questionnaire was developed and utilized in this study. The questionnaire that had both open and close ended items for collection of primary data was used. The organised data was interpreted on account of concurrence to objectives using assistance of computer packages especially statistical package for social scientists (SPSS) version 20 to communicate research findings. In analysis of data, a content analysis and descriptive analysis was employed which included frequencies and percentages. The researcher organized the results around the four objectives of the study. While the study reveals that the level of education attained by majority of the members of the funded youth groups would be adequate for well management of their entreprises, the dismal repayment rate of youth fund amongst the funded youth groups would be attributed to the loopholes in the lending procedure which lacked physical vetting of the funded groups, lack of guarantors requirements and inappropriate repayment mode. It's noted that lack of entrepreneurial experience amongst the funded youth groups and failure by YEDF to train funded youth groups on BDS training in a great way contributed to the low rate of repayment of YEDF in Likoni Constituency.