The section discusses the findings of the study based on the four research objectives, namely; to assess the extent of growth of the youth enterprises that have benefitted from the YEDF, to establish the complementary services provided by the YEDF to the youth, to evaluate the challenges faced by the youth in accessing financing by the YEDF and to suggest policy measures to improve the quality of services provided by the Fund.
5.2.1 Growth of youth enterprises
The first objective was to establish whether there has been a registered growth in the number of youth enterprises as measured by those registered youth enterprises seeking funding in the YEDF, their capacity to pay back the loan borrowed on time and other measures such as increased sales, new product launch or increased profits. Perception data on growth was used.
The findings were that there has been a marked increase in the expansion of enterprises being managed by the youth over the years through both the number that have registered their operations with the YEDF as well as those youth business units that have been able to repay their loan advancement successfully. The increased number of such youth enterprises is a positive indicator to the extent to which their operations have grown over time. Indeed according to the KRA (2011) Annual report, the informal sector registered a 24% growth for the period 2009- 2010 despite the political unrest that was experienced earlier on and the same report points out that the youth constituted over 50% of the new enterprises. The informal sector constituted a
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large proportion of the youth enterprises and as Bowen (2009) noted, the number of enterprises managed by the youth seeking licenses at the Nairobi City Council, had increased over time.
The study findings also showed that 65.7% of respondents had received over Kshs.500.000 in loans, an indication that their enterprises were growing as they had started with smaller loans of Kshs.50, 000. This position is supported by the YEDF (2014) report that indeed the number of youth enterprises that have sought financing from the Fund to expand their businesses had grown to 157,000 youth-run businesses since inception till 2012, and had received about Kshs.5.9billion and created more than 300,000 jobs.
The findings also showed that the youth perceived that their sales and profits had increased. This finding is supported the by Global Entrepreneurship Monitor (2012) Report which suggested that most of the firms registering growth in their turnover are youth-based and attributed this to their aggressiveness and the need to be economically empowered. Another important finding was the ability to introduce new products as a sign of growth. The introduction of new products into the market suggests innovation. This growth dimension demonstrates the Schumpeter Theory (2002) that entrepreneurship involves the innovation to combine resources to develop products that previously did not exist. In its own way, therefore, the YEDF may be considered as promoting innovation.
5.2.2 Complementary services provided by the YEDF
It is not enough to provide financial assistance to the youth. They need to be equipped with the necessary know-how on how to manage the same funds and grow their businesses. Consequently, the second objective sought to establish the complementary services being offered by the YEDF. The study found that the complementary services that were being offered by the YEDF aimed at equipping them with the necessary skills to run their enterprises successfully. The study found that the youth are continuously being trained on customer service and to identify their changing needs. The youth groups were also receiving marketing support, and training on how to package their products and services, develop business plans and proper record keeping. By the end of the year 2012, the Youth Fund had trained over 200,000 youth on
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marketing, management of funds, compliance to labour laws and linkages (YEDF 2014). This position supports the International Finance Corporation (2013) report that highlighted the need for the YEDF to increase the number of youth organizations that benefit from training services.
This finding is consistent with that made by Pooja (2009) who noted that in India for example, the India Youth Fund that was launched to support the country’s rapidly expanding youthful population, provides pastoral guidance to projects run by the youths and at the same time provides training aimed at assisting the Indian youths acquire pivotal entrepreneurial skills, marketing skills, and other management skills for increasing the growth of their enterprises.
In addition, the YEDF organizes trade fairs aimed at getting new customers for the youth enterprises. Youth entrepreneurs who exhibit products of exceptional quality are sponsored to exhibit those products outside their countries, which provide them with a link to the export market. These actions jointly reinforce the importance that the YEDF places on offering complementary services apart from its core function of providing finances to the youth.
5.2.3 Challenges in accessing YEDF
The third objective was to highlight some of the challenges that the youth entrepreneurs face in accessing the Fund. The major challenges that the youth face included bureaucratic challenges and the extended loan disbursement periods. This finding supports that of Stevenson and St. Onge (2005) who noted that some of the youth enterprises funding organizations suffer from excessive bureaucratic decision making which slows down the speed of decision making and therefore the rate of funding the youth organizations. This slow pace of funding may cost youth enterprises business opportunities as they may not have access to adequate capital to take up opportunities as they arise.
The requirement to have a business proposal and the extensive process in registering the youth groups were also identified as key challenges. Njogu (2013) noted youth owned enterprises are often denied funds for expansion even when they have solid business plans because their ideas just “fail to convince.” Most institutions do not have enough confidence on projects run by the young people, as they are often seen as lacking in management skills. As such, even when the requirement to have a business proposal has been met, it may not guarantee funding.
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However, the respondents indicated that the YEDF provides sufficient information on the terms of the loan (mean = 4.16) and that it is easy to access government funding for business growth (mean = 3.89). This suggests that once the youth groups are able to navigate through the initial loan application processes, it becomes easier to get future loans to grow their businesses, as they are more aware of the requirements and expectations.