Factors affecting the accessibility, use and repayment of youth loans in Mayuge district: case study of satanic bank Mayuge branch

Abstract

Like many other countries, Ugandan government came out with youth loan project to help increase/create capital for the youths in the country. This project has a number of hindrances to its progress hence the study on the factors affecting the accessibility, use and repayment of the youth loans with specific objectives of establishing the types of collateral security used to access the loan, determining the use of the loans, assessing the repayment method of the loan and determining the challenges of the youth in access, use and repayment of the loan. The study majorly relied on primary data provided by the youth who borrow their loans from Stanbic Bank Mayuge Branch. The data sourced from individuals show that most of the youth use car/motorcycle logbooks in accessing the loan and the relationship between collateral security and the amount of the loan is insignificant (P-value = 0.444), there is no association between the use of the loan and the loan amount (P-value = 0.456) and the no relationship between the use and the repayment (correlation -0.1). On the operations of the youth loan, we find that the major role players are not entirely fulfilling their mandates and some have sidetracked from the initial procedures and criteria. We do not find significant evidence of the youth loan impact on access, use and repayment its intended objectives- after implementation. On the policy front, we propose that for the youth loan to have a lasting impact on its intended objectives the access of youth loan should be approached comprehensively and it should target productive sectors with high employment creation potential. A strong institutional framework and elimination of obstacles to access of the loan are other recommendations arising out of the study.