The Role Microfinance in Economic Empowerment of the Youth (Acase of Mombasa County)

Abstract

The practices of microfinance services for the poor have grown immensely since its beginning in the 1970s. It has become one of the most popular poverty reducing strategies in the world. The study used Grameen bank model and development as freedom theory to analyze the effect that microfinance had on poverty reduction. The study aimed at exploring the contribution of microfinance products such as microcredit, micro insurance and micro saving to the youth who make up to more than 60% of the country's population. The contribution involved the role of microfinance in enhancing entrepreneurship development, sighting problems surrounding the credit barriers, and creation of employment through innovative business activities. The research employed descriptive research design using simple random sampling which enables every member of the population to have an equal and independent chance of being selected as respondents and also simplest, most convenient and bias free selection method. The data was collected by use of questionnaire thereafter analyzed using both quantitative and qualitative techniques. The study results showed that MFIs have role to play in economic empowerment of the youth. Loan repayment default was largely a result of non supervision of borrowers by the MFIs, as well as inadequate training of borrowers on utilization of loan funds before they received loans. The study recommended that for sustainability all the costs involved need to be recovered and kept minimum to ensure a continuous sustainable growth of both the MFIs and the youth in poverty alleviation.