Factors Affecting Utilization of the Youth Enterprise Development Fund and the Performance of Micro and Small Enterprises in Belgut Constituency, Kenya

Micro and Small Enterprise (MSE) sector contributes significantly to employment creation and poverty alleviation in Kenya. Youth Enterprise Development Fund is one of the initiatives put in place to encourage the establishment of enterprises among the youth. Like in other parts of the world, Micro and Small Enterprises in Kenya face a number of constraints including; access to finance, legal and regulatory challenges, limited entrepreneurial skills and access to market. These limitations have been found to restrict performance of enterprises leading to low income as well as lowering chances of transition into a medium or large enterprise. Various policies and initiatives have been formulated and implemented to optimize the potential of the sector. Despite the interventions, it is not clear whether or how the sector is responding to the initiatives in Kenya.  It is on this backdrop that this study sought to investigate key factors affecting utilization of the Youth Enterprise Development Fund as well as establishing the impact of the Fund on the performance of Micro and Small Enterprises. The study adopted a non-experimental research design using cross-sectional data obtained from a random sample of youth enterprise owners in Belgut constituency. The factors found to influence utilization of the Fund among the youth include gender, marital status, education level, location of enterprise, source of income, registration, startup capital range and membership to youth group. Using the Average Treatments Effect, the study found that utilization of YEDF significantly increases performance of micro and small enterprises. Utilization of YEDF among the youth in Belgut constituency was able to on average increase enterprises’ employment by 8 percent compared to the enterprises that did not utilize the YEDF. The study recommends ease of registration procedures, diversification of incomes among the enterprises, periodic training and sensitization on how to use and budget for the fund received.