Business Support Services and Growth of Youth Owned Enterprises Benefiting From Uwezo Fund in Kitui County, Kenya

Abstract

The study sought to examine the influence of business support services on growth of youth owned enterprises benefiting from Uwezo Fund in the larger Kitui County. Business growth through business support services like entrepreneurial skills and financial services has been lauded by many studies as an engine which can tap well the practical and creative business approaches affecting the youth and other disadvantaged groups. In an effort to reduce the ever-increasing high levels of unemployment and poverty amongst the youth, the Government of Kenya has since independence established many affirmative action funds like the Youth Enterprise Development Fund in order to accelerate the growth of youth owned enterprises. However, a large number of youth is still languishing in poverty and unemployment. Youth who venture into their own businesses mostly face the challenge of inadequate skills like the skill of identifying an appropriate business line of investment, poor access to credit and market access. This has become the main reason for high enterprise failure rates with up to 80 percent of new businesses collapsing within their first three years of operation. Uwezo Fund was established in the year 2013 to offer various business support services amongst the vulnerable groups and encourage enterprise growth through the provision of effective business support services like; interest free lending services, business development services, business mentorship services, market and marketing skills and Access to Government Procurement Opportunities (AGPO). The study sought to examine the influence of Uwezo Fund business support services particularly its lending services, business development services and market access on the growth of youth owned enterprises. The study was anchored on the theory of stages of development by Churchill & Lewis. The study adopted a descriptive research design. A sample of beneficiaries’ enterprises at the County level formed a study’s sample size of 100 groups, a 20% of the total 501 funded youth groups by 2016/2017 financial year, from which one enterprise in each group was selected for study. Stratified random sampling method was used in selecting the respondents. Primary data was collected using questionnaires that were self-administered. The content validity of the research instruments was checked using opinions from the experts while construct validity through consistency in both the conceptual and theoretical reviews during the questionnaire preparation. Reliability of collected data was achieved through a pilot study and a Cronbach’s Alpha, with 0.7 ranges. Descriptive and quantitative methods of study were used in data collection, data presentation and data analysis. Quantitative data was analyzed using frequency tables and percentages while qualitative data interpreted through the use of linear regressions. From the findings, all independent variables except market access through AGPO had a significant linear relationship with the dependent variable. Based on the study’s findings, the study recommends that Uwezo Fund should strengthen its business support services especially market access through AGPO and scope of business in order to positively influence the growth of youth owned enterprises. The study also recommends for a further research on the causes of ineffectiveness in market access amongst the youth enterprises. The study finally recommends for a further research on Uwezo Fund business support services which are not offered by the fund like infrastructural services, transaction processing, merging the fund with other existing business support service providers and similar studies in other counties since findings from one County is not wide enough to generalize on the influence of Uwezo Fund support services on the growth of youth owned enterprises in the whole Country.

This is an open-access article published and distributed under the terms and conditions of the  Creative Commons Attribution 4.0 International License of United States unless otherwise stated. Access, citation and distribution of this article is allowed with full recognition of the authors and the source.