Factors influencing youth’s access to micro finance services: a case study of Kajjansi, Wakiso District

Abstract

Although micro finance services have endeavored to offer financial services to the vulnerable groups, (youth), some youths have failed to access the services from the financial institutions in Kajjansi, Wakiso district. The study sought to find out the factors influencing the youth’s accessibility to microfinance services in Kajjansi, Wakiso district. Analysis was conducted on 135 youths who own businesses in Kajjansi. A binary logistic regression model was used to investigate the influence of the factors affecting youth’s accessibility to microfinance services. Results indicated that out of the total number of youths owning businesses that were interviewed, majority (45.19%) were aged between 24 to 29 years and minority (15.56%) were aged between 30 to 35 years. Majority (54.07%) were males whereas most of them (52,59%) had bachelor’s degree, followed by those with diploma (26.67%) and the minority had master’s degrees (6.67%). Furthermore, results showed that out of the total number of youths interviewed, majority (54.07%) claimed that the interest rates from micro finance institutions they borrow from was low, majority (57.78%) revealed that they had the required collateral security for them to acquire loans whereas 61.48% of the youths reported that their businesses generated enough profits to enable them acquire loans from microfinance institutions. The main factors highly associated with the youth’s accessibility to microfinance services were interest rates (p=0.003), collateral requirement (p=0.005) and type of business owned by the youths (p=0.001). Results showed that showed that youths who reported that interest rates were low were 3.98 times more likely to access the micro finance services as compared to those who reported that interest rates were high. Results further showed that youths who possessed collateral requirement were 3.6 times more likely to access microfinance services than those without the requirements whereas youths whose businesses generated adequate profits were 4.75 times more likely to access microfinance services as compared to those whose businesses could not generate adequate profits. The study recommended that the value of collateral security should be lowered and also microfinance institutions should lower the rates of interest so as to enable more youths to acquire and pay back the loans acquire.