BORROWERS’ CHARACTERISTICS AND REPAYMENT OF INDIVIDUAL LOANS PROVIDED BY YOUTH ENTERPRISE DEVELOPMENT FUND IN EMBU COUNTY, KENYA
Abstract
Purpose of the Study: To investigate the effect of borrower characteristics on the repayment of individual loans provided by the Youth Enterprise Development Fund (YEDF) in Embu County, Kenya.
Statement of the Problem: Individual loan repayment has been slow with an increased number of loan defaults among individuals borrowing from YEDF in Embu County. Borrower characteristics play a key role in loan repayment among individuals. Studies have shown mixed results regarding the effect of borrower characteristics, with local studies showing research gaps.
Methodology: The study adopted an explanatory research survey design and positivism research philosophy. The target population was 705 individual loan youth beneficiaries from YEDF Embu County, with a sample of 255 individuals selected through stratified random sampling. The study collected primary data through structured questionnaires, and descriptive and inferential statistics were used for analysis. Logit regression analysis was used to investigate the relationship between the explanatory variables and the predicted variable.
Findings: Through descriptive analysis, the study found that there were more male beneficiaries than female beneficiaries. The majority of individual loan beneficiaries were within the age bracket of 30-34 years. The study also found that most of the respondents were married. On academic qualification, the majority of loan beneficiaries had agreed to have an academic qualification. The study further indicated that almost all of the respondents had no business management training. Additionally, borrower characteristics had a positive effect on loan repayment.
Conclusion: Borrower characteristics have no significant effect on the repayment of individual loans provided by YEDF in Embu County, Kenya.
Recommendation: YEDF should endeavor to sensitize and train all Kenyan citizens who have attained the age of youth, both male and female, married and single, educated and not educated, on its loan product and the importance of repaying the amount borrowed on time.
Keywords: Borrowers’ Characteristics, Repayment, Individual Loans, Youth Enterprise, Development Fund
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