Low Borrowing Rate of Youth Enterprise Development Fund Loan By Youth in Rarieda District

Youth unemployment is a global challenge. According to Kenya National Human Development (KNHD) report of 2009, unemployment in Kenya stood at 23%. The youth form two - thirds of the total labour force in the country yet the majority (61 %) is unemployed. The youth in Rarieda district number approximately 41,443 while the rate of unemployment is about 17% above the national rate. The Youth Enterprise Development Fund (YEDF) is one of the interventions that the government has put in place to help the youth be self employed. Rarie.da district has about 721 registered youth groups with the main reason for registration being to access loans. However, these groups have not been enthusiastic to come up and take the loans so as to exhaust the funds allocated to the constituency and be able to receive more. Out of all these registered youth groups, only about 20 apply for the loans on a quarterly basis. The government has cumulatively allocated Ksh. 3.8 billion to the fund which it lends to youth entrepreneurs through various channels. This study therefore, sought to examine the factors that contribute to the low borrowing rate of the YEDF loan in Rarieda district. Specifically, the study sought to find out the factors that contribute to the low borrowing rate of YEDF by the youth, establish the knowledge and attitude of the youth towards the fund and fmd out ways of bringing up the borrowing rate of the fund in Rarieda district. The .study was guided by rational choice theory by George Homans formulated in 1961. The theory stated that people were often motivated by money and the possibility of making profit, calculating the likely costs and benefits of any actions before deciding what to do. The study population comprised theyouth from 159 registered youth groups in Rarieda district arrived at using Glen Israel's formula n=N/1+N (e) 2. The study employedsimple random sampling to select the study sample. The study used descriptive research design involving both quantitative and qualitative research methods. The quantitative data was collected by the use of semi structured questionnaires. Quantitative data was Coded and analyzed using the Statistical Package for the Social Sciences (SPSS) version 12 and presented in frequencies, tables and percentages. The qualitative data was collected using key informant interview with 6 youth group leaders and 2 district youth enterprise development fund officers. Qualitative was analyzed using content analysis. That involved going through the whole data collected, sentence by sentence, word by word, identifying recurring themes and coding them. The knowledge generated from this study may supplement the efforts of the fund in trying to bring up the number of youth groups applying for the money.The research fmdings were that most youth had low levels of education; some were ignorant about the importance of the fund and therefore had a negative attitude towards it. Minimal capacity building before and after the disbursement of the fund was also cited as acontributing factor. The study therefore recommended that otherthan employing more and facilitating the youth enterprise development fund officers, entrepreneurial training and capacity building should also be prioritized to help the youth change their perception about the fund