Effect of economic, institutional and social factors on access to Youth Enterprise Development fund in Migori county, Kenya

Abstract

More than 50 percent of the current global population aged 15-24 years, survive on below 2 dollars daily. This state of affairs is particularly pronounced in less developed economies like Kenya where youths are subjected to problems of unemployment, job insecurity as well as low incomes. Youth Enterprise Development Fund (YEDF) supports the social pillar of the Vision 2030 towards addressing challenges of poverty as well as unemployment among youths in Kenya. The World Bank’s Global Findex Database reports that 71 percent of youths from high- income economies save and access credit while 43 per cent have been reported from developing countries. However, access to YEDF has been all-time low in Kenya covering only 30 to 35 percent. The reviewed studies have mainly concentrated on the effect of YEDF in eradicating poverty and youth unemployment by studying the youths who have accessed the funds but they have neglected those who have not accessed the funds and why. The purpose of this study was to investigate effect of economic, institutional and social factors on access to YEDF by youth groups in Migori County. The specific objectives of the study were; to investigate the effect of economic factors on access to YEDF, to determine the effect of institutional factors on access to YEDF, and to analyze the effect of social factors on access to YEDF in Migori County. This study was founded on information assymetry theory. It used correlational research design. Targetting all the 293 registered youth groups and 8 representatives of Youth Enterprise Development Fund in each Sub-County of Migori County, Yamane formula was used to determine the sample size. Cluster, proportionate and simple random sampling were adopted in which 169 youth group leaders and 8 administrators of the YEDF were selected for the study which gave rise to 177 respondents. Questionnaire and interview schedule assisted in gathering primary data. Piloting of the study was carried out to ascertain the validity and reliability of the data collection instruments. Given the economic factors, the study found that income status and access to YEDF in Migori County have a positive and significant relationship (.200, p=0.000). However, business support services and access to YEDF in Migori County have a positive but an insignificant relationship (.035, p=0.599). Likewise, the findings indicated that institutional factors (disbursement procedures and physical location of youth groups) and access to YEDF in Migori County have a positive and significant relationship (.118, p=0.026; .244, p=0.000 respectively). Likewise, social factors (education level, entrepreneurship training and group dynamics) and access to YEDF in Migori County have a positive and significant relationship (.240, p=0.000; .214, p=0.001 and .208, p=0.000 respectively).This is evidenced by the R square value which is 0.781 which is more than 0.5 implying that all the three factors explain 78.1% of the access to YEDF in Migori County. This is further supported by the Fstatistic = 66 where the value was greater than the critical value at 0.05 significance level, F statistic = 66 > F critical = 2.669 (7, 133). The study recommends that the low-income earners be reached for inclusivity; YEDF loan disbursements procedures be simplified; the YEDF offices be located also in remote parts of the country for ease of accessibility and entrepreneurial training be offered to youth groups. The outcome study would be useful in enhancing the understanding of factors affecting access to YEDF and help in formulating strategies to improve access, use and repayment of YEDF. The study concludes that the economic, institutional and social factors affect access to YEDF in Migori County.