FACTORS INFLUENCING THE SUCCESS OF YOUTH …
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FACTORS INFLUENCING THE SUCCESS OF YOUTH ENTREPRENEURSHIP BUSINESS STARTUPS: A CASE OF TECHNOSERVE STRYDE PROGRAM IN NYERI COUNTY BY CAROLYNE W. MAINA UNITED STATES INTERNATIONAL UNIVERSITY – AFRICA SUMMER 2016
Transcript of FACTORS INFLUENCING THE SUCCESS OF YOUTH …
FACTORS INFLUENCING THE SUCCESS OF YOUTH
ENTREPRENEURSHIP BUSINESS STARTUPS: A CASE OF
TECHNOSERVE STRYDE PROGRAM IN NYERI COUNTY
BY
CAROLYNE W. MAINA
UNITED STATES INTERNATIONAL UNIVERSITY – AFRICA
SUMMER 2016
FACTORS INFLUENCING THE SUCCESS OF YOUTH
ENTREPRENEURSHIP BUSINESS STARTUPS: A CASE OF
TECHNOSERVE STRYDE PROGRAM IN NYERI COUNTY
BY
CAROLYNE W. MAINA
A Research Project Submitted to the Chandaria School of Business in
Partial Fulfilment of the Requirement for the Degree of Masters in
Business Administration (MBA)
UNITED STATES INTERNATIONAL UNIVERSITY – AFRICA
SUMMER 2016
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STUDENT’S DECLARATION
I, the undersigned, declare that this is my original work and has not been submitted to any
other college, institution or university other than the United States International
University in Nairobi for academic credit.
Signed: Date:
Carolyne Maina (ID: 618497)
This research report has been presented for examination with my approval as the
appointed supervisor.
Signed: Date:
Fred Newa
Signed: Date:
Dean, Chandaria School of
Business
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COPYRIGHT
© Carolyne Wanjiku Maina, 2016
All rights reserved including rights of reproduction in whole or part in any form without
the prior permission of the author or United States International University- Africa or
Office of the Deputy Vice Chancellor Academic Affairs.
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ABSTRACT
The general objective of this study was to determine the factors that influence success of
youth business startups. Specific objective for the study were; the extent to
entrepreneurship training influence the success of youth business start-ups; How access to
finance influence the success of youth business start-ups, and how business development
services enhance success of youth business start-ups.
This study adopted a descriptive survey research design. The population of the study was
composed of 410 youth under TechnoServe’s Stryde entrepreneurship training program in
phase two, cohort one youth beneficiaries in Nyeri County. Stratified sampling technique
was adopted to select a sample size of 196. The study primary data was collected using
closed ended structured questionnaires. Data was analyzed for descriptive statistics and
inferential statistics using Statistical Package for Social Sciences (SPSS). Findings were
presented using tables and figures.
The findings on the influence of entrepreneurship training on success of youth business
start-ups revealed the existence of a positive relationship between entrepreneurship
training and success of youth entrepreneurship. The relationship was statistically
significant.
The findings on how access to finance influence on success of youth business start-ups
revealed the existence of a positive relationship between access to finance and success of
youth entrepreneurship. The relationship was statistically significant.
The findings on how business development services influence on success of youth
business start-ups revealed the existence of a positive relationship between business
development services and success of youth entrepreneurship. The relationship was
statistically significant.
This study has concluded that the existence of a positive relationship between
entrepreneurship training and success of youth business start-ups, this study concludes
that the relationship between entrepreneurship training and success of youth business
start-ups was statistically significant. This study also revealed the existence of a positive
relationship between access to finance and success of youth business start-ups, therefore,
the study concludes that the relationship between access to finance and success of youth
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business start-ups was statistically significant. Equally, this study has revealed the
existence of a positive relationship between business development services and success of
youth business start-ups, therefore, this study concludes that the relationship between
business development services and success of youth business start-ups was statistically
significant.
This study recommends that TechnoServe management should expand training modules
beyond finance and record keeping to marketing, sales, elevator pitches, and sustainable
growth for business start-ups. TechnoServe should also lobby government to ensure that
interest on youth loans is minimal and affordable. Youth having increased opportunities
to enhance loans will lead to enhanced success of business start-ups. Finally,
TechnoServe should develop mechanisms to ensure that business development services
such as access to marketing services, access to information technology services, and
access to channels of sales and promotion are available to the youth. These services
should not be occasional provisions, but rather, they should be accessible all year round.
This can be accomplished through collaborations and partnership with the government,
donor agencies and other NGOs offering these services.
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ACKNOWLEDGEMENT
The researcher wishes to express her sincere gratitude to her supervisor, Mr. F.O. Newa
for his invaluable input on this project. She would also like to thank TechnoServe Stryde
Nyeri Team for making this research project possible. Last but not least she would like to
thank her family and friends for their encouragement, constructive criticism and
unconditional support on this and every endeavor. And to God, for always breaking the
glass, just for me.
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DEDICATION
To God.
Without Him I can do nothing.
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TABLE OF CONTENTS
STUDENT’S DECLARATION ..................................................................................... ii
COPYRIGHT ............................................................................................................... iii
ABSTRACT ................................................................................................................... iv
TABLE OF CONTENTS ........................................................................................... viii
LIST OF TABLES .......................................................................................................... x
LIST OF FIGURES ....................................................................................................... xi
LIST OF ABBREVIATIONS ...................................................................................... xii
CHAPTER ONE ............................................................................................................. 1
1.0 INTRODUCTION ............................................................................................... 1
1.1 Background of the Study ....................................................................................... 1
1.2 Statement of the Problem ...................................................................................... 5
1.3 General Objective .................................................................................................. 7
1.4 Specific Objectives ................................................................................................ 7
1.5 Significance of the Study ...................................................................................... 8
1.6 Scope of the Study................................................................................................. 9
1.7 Definition of Terms ............................................................................................... 9
1.8 Chapter Summary ................................................................................................ 10
CHAPTER TWO .......................................................................................................... 12
2.0 LITERATURE REVIEW ................................................................................. 12
2.1 Introduction ......................................................................................................... 12
2.2 Successful Business Start-Ups ............................................................................ 12
2.3 Influence of Youth Entrepreneurship Training on Business Start-Ups. .............. 13
2.3 How Access to Finance Affects the Success of Youth Business Start-Ups ........ 18
2.4 Business Development Services and Success of Youth Start-Ups. .................... 22
2.5 Chapter Summary ................................................................................................ 27
CHAPTER THREE ...................................................................................................... 28
3.0 RESEARCH METHODOLOGY .................................................................... 28
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3.1 Introduction ......................................................................................................... 28
3.2 Research Design .................................................................................................. 28
3.3 Population and Sampling Design ........................................................................ 28
3.4 Data Collection Methods ..................................................................................... 31
3.5 Research Procedures ........................................................................................... 31
3.6 Data Analysis Methods ....................................................................................... 31
3.7 Chapter Summary ................................................................................................ 32
CHAPTER FOUR ........................................................................................................ 33
4.0 RESULTS AND FINDINGS ............................................................................ 33
4.1 Introduction ......................................................................................................... 33
4.2 Demographic Data............................................................................................... 33
4.3 Entrepreneurship Training and Success of Youth Business Start-Ups ............... 36
4.4 Access to Finance and Success of Youth Business Start-Ups ............................ 38
4.5 Business Development Services and Success of Youth Business Start-Ups ...... 43
4.6 Success of Youth Business Start-Ups ................................................................. 49
4.7 Correlation Analysis ............................................................................................ 50
4.8 Regression Analysis ............................................................................................ 51
4.9 Chapter Summary ................................................................................................ 53
CHAPTER FIVE .......................................................................................................... 54
5.0 DISCUSSION, CONCLUSSION AND RECOMMENDATIONS ............... 54
5.1 Introduction ......................................................................................................... 54
5.2 Summary ............................................................................................................. 54
5.3 Discussion ........................................................................................................... 55
5.4 Conclusion ........................................................................................................... 59
5.5 Recommendation ................................................................................................. 60
REFERENCES ............................................................................................................. 62
APPENDICES ............................................................................................................... 68
APPENDIX I: COVER LETTER ............................................................................... 68
APPENDIX I1: RESEARCH QUESTIONNAIRE ................................................... 69
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LIST OF TABLES
Table 4.1: Reliability Analysis .......................................................................................... 33
Table 4.2: Entrepreneurship Training ................................................................................ 37
Table 4.3: Access to Loans Has Stringent Conditions for Youth Start-Ups ...................... 39
Table 4.4: Stringent Loan Hinder the Success of Youth Business Start-Ups .................... 40
Table 4.5: Stringent Loan Conditions Should Be Abolished to Access to Finance .......... 40
Table 4.6: Training Has Enhanced Your Business Experience ......................................... 41
Table 4.7: Lack of Business Experience Hinders Access to Finance ................................ 41
Table 4 8: Lack of Experience Should Not Hinder Access to Finance ............................. 42
Table 4.9: Currently Interest Rates for Loans on Youth Start-Ups Are High ................... 42
Table 4.10: High Interest Rates Hinders the Success of Youth Start-Ups......................... 43
Table 4.11: You Have Marketing Services for Your Goods Services ............................... 44
Table 4.12: Marketing Support Services is Important to Youth Start-Up Success ........... 45
Table 4.13: Marketing Services Should Be Part of Entrepreneurship Training ................ 45
Table 4.14: Your Business Connections help You Market Your Products ....................... 46
Table 4.15: You Have Received Support Services on Use of ICT .................................... 46
Table 4.16: ICT Services Enables You to Reach Clients Quickly .................................... 47
Table 4.17:ICT Services Are Essential for the Success of Your Start-Ups ....................... 47
Table 4.18: Sales and Promotion Support Through TechnoServe ..................................... 48
Table 4.19: Sales and Promotion Makes your Products Known to Clients ....................... 48
Table 4.20: Sales and Promotion is Essential for Success of Your Start-Up .................... 49
Table 4.21: Success of Youth Business Start-Ups ............................................................. 50
Table 4. 22: Correlation Analysis ...................................................................................... 51
Table 4.23: Multiple Regression factors ............................................................................ 52
Table 4.24: ANOVA .......................................................................................................... 52
Table 4.25: Multiple Regression Coefficients ................................................................... 52
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LIST OF FIGURES
Figure 4.1: Respondents Gender ........................................................................................ 34
Figure 4.2: Respondents Age ............................................................................................. 34
Figure 4.3: Respondents Level of Education ..................................................................... 35
Figure 4.4: Respondents Marital Status ............................................................................. 35
Figure 4.5: Area of Entrepreneurship ................................................................................ 36
Figure 4.6: Initial Start Up Capital .................................................................................... 38
Figure 4.7: Hindrances on Access to Capital ..................................................................... 39
Figure 4.8: Type of Institutions that Provide Business Development Services ................. 43
Figure 4.9: Challenges Facing Marketing of Youth Start-Up Products ............................. 44
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LIST OF ABBREVIATIONS
BDS Business Development Services
ILO International Labor Organization
MCF MasterCard Foundation
MFIs Micro Finance Institutions
MSEs Micro and Small Enterprises
MOYA Ministry of Youth Affairs
OECD Organization for Economic Cooperation and Development
STRYDE Strengthening Rural Youth Development Through Enterprise Program
TNS TechnoServe Inc.
TPB Theory of Planned Behaviour
YEDF Youth Enterprise Development Fund
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CHAPTER ONE
1.0 INTRODUCTION
1.1 Background of the Study
The global financial crisis that began in 2008, the worst since the great depression has had
an adverse long lasting ramifications all over the world; resulting to job losses and rising
unemployment. Young people have found themselves in a particularly vulnerable
position. The global financial crisis has brought with it measures such as rationalization
as a cost cutting measure employed by many corporations to survive tough economic
times and remain competitive. This inevitably leads to job losses and young people are
the first to go because they tend to be youngest in the organization and the cheapest to
layoff.
According to the OECD (2015) by 2019, more than 212 million people will be out of
work, up from the current 201 million. According to the Commonwealth Secretariat and
La Francophonie (2014), young people are more at risk of unemployment than older
cohorts. International Labor Organization (2015) statistics puts global youth
unemployment rate of almost 13 per cent in 2014 and a further increase expected in
coming years, estimating seventy-three million young people to be unemployed.
By contrast, older workers have fared relatively well since the start of the global financial
crisis in 2008. According to OECD (2015) Employment Outlook 2015, the country with
the highest youth unemployment is Spain, with over 53% of their labor force aged 15-24
out of work. Over half of those aged between 15-24 are also unemployed in South Africa
and Greece. The list is dominated by European Union members, which occupy eight of
the top 10 spots. Equally, the report indicated that 7.5 million young Europeans are not
employed. This has led to many governments across the world to change polices and
create enabling environments to enable its citizens start businesses that can create
employment for others and themselves.
Shimer (2012) argues that the youth make up the bulk of the total number of unemployed
in Africa. They represent 60 per cent of total unemployment in the region The ratio
youth-to-adult unemployment rates drastically rises in countries such as Tunisia, South
Africa and Morocco where young people are nearly three times more likely to be
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unemployed than their adult counterparts. The youth unemployment rate in Africa has
been evolving up and down in recent years with a declining trend in sub-Saharan Africa
and the highest ever in North Africa. (ILO, 2015).
The OECD (2012) report emphasized that the incidence of long-term unemployment
among youth in sub-Saharan Africa reached 48.1 per cent in 2014; consequently, few
youths are able to match their aspirations to reality, with limited job opportunities quickly
slipping away. Furthermore, more than two-thirds of Africa’s population is aged below
25; sub-Saharan Africa is the youngest region in the world. The youth population
constitutes about 37 per cent of the total labor force, a social category that is projected to
expand more rapidly than anywhere else in the world (Naudé, 2011)
Despite commendable annual economic growth rates of 5 per cent in recent years and
notable progress achieved in the area of education, including higher education, sub-
Saharan Africa has been unable to expand employment opportunities for young people,
especially the most educated ones (Njonjo, 2010). The mismatch between high rates of
economic growth and job creation is widening income inequalities and fueling social
tensions. It is therefore imperative to increase the employment intensity of growth
through policies that increase the demand for labor while at the same time enhancing the
employability or the integration of young women and men into the labor market.
According to John, (2012) youth in Africa are not only they are marginalized and often
excluded from society as functional and effective agents of change, progress and social
dynamism, but they undermined in access to opportunities for economic growth. This has
led to a situation where most youth in Africa are idle, while others are involved in crime,
thus affecting Africa’s socio-political stability. The recent wave of discontent sweeping
North Africa is illustrative of the disruptive consequences of youth unemployment in
general, and unemployed graduates in particular. The underlying conditions may in
various ways be dormant and latent in other parts of the continent. In realizing the
demographic dividend, African countries can increase the size and proportion of the
working age population and trigger high rates of economic growth.
To take care of this problem most nations across the globe are encouraging the youth to
venture into entrepreneurship as a way of earning a living and reducing cases of youth
unemployment (Gries and Naudé, 2011). However, venturing into entrepreneurship is not
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by itself, a panacea for youth unemployment problems. Youth have to learn how to run
successful business entrepreneurship start-ups. Osterwalder and Pigneur (2010) define
successful youth business start –ups as entrepreneurship ventures that have effectively
identified a customer’s problem, found a solution, added value, established channels to
deliver this solution the customers, and as a result, have obtained customers buy-in and
commitment to the product or services in a manner that generated sustainable revenue and
profits to the business. Gries and Naudé, (2011) on the other hand argues that successful
business start-ups among the youth does not constitute merely the ability to sell a product
or service, but rather, ability to establish a need, and provide solutions in an effective and
sustainable manner.
In terms of seeking solutions of youth unemployment through entrepreneurship start-ups,
Kenya has had a share of challenges. According to Njonjo (2010) as at 2009, 78.31% of
the Kenyan population is below the age of 35. Of these, age cohort between 18 and 30,
who are the focus of this study, constitute 24.59% of the population. This has brought
about many organizations training on entrepreneurship to enable youth to start businesses.
Like the rest of the world, the Kenyan government has now embraced entrepreneurship
development through formulation of policies favorable to development of small
enterprises particularly in the recent years. Such policy initiatives include Sessional Paper
number 2 of 2005 on development of MSEs for wealth and employment creation
(Government of Kenya, 2005); Sessional Paper number 2 of 1992 for small enterprise and
jua kali development in Kenya; Sector Plan for labor, youth and human resource
development 2008-2012 (Republic of Kenya, 2008); Poverty Reduction Strategy Paper
1999-2015 and MSE bill 2006 which led to the establishment of a council to facilitate the
development of MSEs and creation of MSEs development fund (Government of Kenya,
2006).
In addition, the Ministry of Youth Affairs (MoYA) established Youth Enterprise
Development Fund (YEDF) in the year 2007 (MoYA, 2008) as a source of capital for
registered youth groups in Kenya to start and/or boost their MSEs (Onugu, 2005). Most
commercial banks and financial institutions have also developed MSE tailored strategies
to give loans to young entrepreneurs in groups or as individuals.
Fatoki (2012) content that in all forty-seven counties of Kenya, the problem of youth
unemployment is the same. Youth complete their higher and tertiary education without
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success in obtaining a paying job, leaving them frustrated thus they abuse alcohol and
drugs. Nyeri County has been in the news in the recent past infamous for the drunken
path the youth have taken and the gender violence in young families due to one of the
spouses abusing drugs or alcohol. Their main economic activity is farming which due to
the small parcels of land divided to the population, there’s little or no land left to give the
youth to farm and earn a daily leaving (Abdullah, 2008).
The youth are left with one option of being casual laborers picking tea and coffee in the
farms earning a small wage on a daily basis insufficient to care for all their needs. The
national government has enabled the YEDF to support local youth in Nyeri with small
loans that can help them initiate projects that can help them earn a living. Non-
governmental organizations (NGOs) too have come in to fill the gap; four international
NGOs are implementing youth related programs mainly in finance, entrepreneurship and
personal effectiveness, health related issues and counselling.
According to TechnoServe (2016), TechnoServe Inc. is a non-profit development
organization founded in 1968 in Norwalk, United States; currently working in over 33
developing countries and has presence in Africa, Latin America and Asia; and has
undertaken economic development work in Kenya since 1973. The MasterCard
Foundation (2015), in partnership with TechnoServe launched a seven-year program,
Strengthening Rural Youth Development through Enterprise (STRYDE) that’s seeks to
enable a more successful transition of rural youth, aged 18 to 30, to economically
independent adulthood, through training, opportunity identification and support. The
STRYDE program has facilitated the transition of 6,500 rural youth in Phase 1 to increase
their productive economic engagement, increase their contribution to household income,
and empowers them to better live independently and are now seeking to empower an
additional 12000 youth in Phase 2
In over 3 continents in the world, TechnoServe has had firsthand experience working with
urban and rural youth mainly on entrepreneurship; focusing on training content, including
agribusiness, value chain opportunities, negotiation and cooperative development. When
done with training, they offer an after-care component that develops stronger linkages
with vocational colleges, agri-businesses, access to finance providers and formal
employment opportunities. They include a business plan competition component that will
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deepen participation and enable more young people to implement their business ideas.
The TechnoServe youth projects came about after several baseline research studies were
done and found the need to address the youth unemployment challenge that was a ticking
time bomb in many countries after the financial crisis.
1.2 Statement of the Problem
Entrepreneurship is the key driver of the country's economy. It is one of the best means
for triggering economic and social development in developing countries like Kenya. It
provides employment to huge masses of people and also creates wealth for a nation.
Kenya is a nation known for its youth population which is considered as one of its
greatest assets, and at the same time, the biggest threat is youth unemployment. Hence,
developing entrepreneurial skills among youth is more important for the growth of the
Kenyan economy. According to ILO (2010), youth entrepreneurship has helped reduced
youth unemployment to half by 2015 is one of the goals that Heads of State of all member
countries of the United Nations adopted in the Millennium Declaration which will help
end the vicious cycle of poverty and social exclusion of youth. According to Njonjo
(2010) as at 2009, 78.31% of the Kenyan population is below the age of 35. Of these, age
cohort between 18 and 30, who are the focus of this study, constitute 24.59% of the
population. This 24.59% of its citizens need to be economically engaged to help it
achieve Kenya’s vision 2030.
There’s has been a steady growth of small and micro business in the world with many
people opting to start businesses after being retrenched or never getting employed.
According to the United States small business administration statistics, only 51% of all
small business survives after the first years of operation. These micro and small business
startups face a myriad of challenges from the word go; challenges affecting startups are
identification of business opportunities and negative view of MSEs (Gries and Naudé,
2011), poor business management due to lack of training (Longenecker, 2006) and
financial problems (Naidu & Chand, 2012). There’s need to identify strategies that can
mitigate this challenges to enable entrepreneurs grow scalable profitable businesses.
Barriers related to access to finance have received a lot attention in recent years and
numerous interventions have been developed and implemented across the world to deal
with youth accessing finance. Government of Kenya has also entered the bandwagon of
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establishing revolving funds like the youth development Fund (YEDF) and the Uwezo
Fund. The Government of Kenya conceived the idea of institutional financing to provide
young people with access to finance for self-employment activities and entrepreneurial
skills development as a way of addressing unemployment and poverty which essentially
are youth problems (GoK, 2009).
The Youth Enterprise Development Fund concept is based on the premise that
encouraging micro, small, and medium enterprise development initiatives is likely to have
the biggest impact on job creation (MOYAs, 2010). The Fund has continued to diversify
its product base by focusing on interventions that are more responsive to the needs of the
youth and are geared towards addressing specific challenges facing young entrepreneurs
(MOYAs, 2011). Despite these efforts, majority of the youth aren’t still able to access the
funds availed by the government hence still not able to start or scale up their businesses.
Barriers related to access to identification of business opportunities and negative view of
MSEs is another challenge young entrepreneurs face. There’s has been a steady growth of
small and micro business in the world with many people opting to start businesses after
being retrenched or never getting employed. According to the United States small
business administration statistics, only 51% of all small business survives after the first
years of operation. Questions arise on why the business startups fail within their first
years of operation; such as, was the business opportunity good, were there many
competitors, was the market ready for the startups business idea, among others.
The small enterprises play an important role in the Kenyan Economy. According to the
Economic Survey (2006), the sector contributed over 50 percent of new jobs created in
the year 2005. Despite their significance, past statistics indicate that three out of five
businesses fail within the first few months of operation (KIPPRA, 2010). While little
evidence exists that these small firms grow into medium-size firms (employing 50 to 100
workers), many of these small firms have the potential to grow and add one to five
employees (Fadahunsi, 2012). However, even with these interventions, youth startups
mortality rate is on an all-time high.
Barriers related to poor business management due to lack of training. Many of the young
entrepreneurs get into business due to lack of employment opportunities. Hence they
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aren’t trained on business from scratch and many are the times the young entrepreneurs
make decisions on emotional and gut feelings. Other poor management decisions are
using tools for existing businesses versus using tools for startups. The Kenyan
government has embraced entrepreneurship development through formulation of policies
favorable to development of small enterprises particularly in the recent years. Such
initiatives, the Ministry of Youth Affairs (MoYA) established Youth Enterprise
Development Fund (YEDF) in the year 2007 (MoYA, 2008) as a source of capital for
registered youth groups in Kenya to start and/or boost their MSEs (Onugu, 2005). Before
youth receive the funds, they undergo through training to assist in group formation and
book keeping. Despite the government’s interventions, many youth are still unable to
make sound decisions for their business startups and some are unable to completely kick
off their business idea, however good it may be.
There are many barriers to entrepreneurship especially for young people as we have
discovered. A number of studies have been done on what makes an entrepreneur, youth
entrepreneurship; barriers to entrepreneurship among others have been done in Kenya
before. However, none of have measured the intention of youth to start a business after
going through entrepreneurship training. This study provides findings in relation to
factors attributing to successful youth entrepreneurship businesses startups.
1.3 General Objective
The general objective was to determine factors that influenced the success of youth
business startups. The case of youth trained by TechnoServe’s Stryde Program in Nyeri
County, from cohort one of second phase
1.4 Specific Objectives
The specific objectives of the study were:
1.4.1. The extent to which the Stryde entrepreneurship training influences the success
of youth business start-ups.
1.4.2. How access to finance affects the success of youth business start-ups.
1.4.3. How Business Development services enhance success of youth business start-
ups.
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1.5 Significance of the Study
1.5.1 TechnoServe Management
The study can be beneficial to TechnoServe and their donor MasterCard Foundation who
are keen in getting to know how to support youth in East Africa start small businesses that
support their families and their countries.
1.5.2 Donors
This study is intended to contribute to knowledge in the area of youth entrepreneurship
and small and micro businesses for donors to be able to know at which point they can
support the youth.
1.5.3 Youth Beneficiaries
This study should enable the youth to know the factors that define a successful business
start-up and the different support programs available to the rural youth in Nyeri. Youth
beneficiaries also get to know the importance of participating in trainings that benefit
their businesses’.
1.5.4 BDS providers
This study provides an unbiased view of entrepreneurship and small business research
that makes use of appropriate research techniques. Any business development service
provider (BDS) in the youth space such as micro finance institutions (MFIs), providers of
training and consulting curricula, finance development organizations, non-governmental
organizations among other service providers, that help in the development of curricula
that is geared towards encouraging an entrepreneurial culture among young people and
equipping them to start or run businesses.
1.5.5 Government
This study has provided findings and recommendations that do inform policy making to
enable youth get targeted support on areas to grow their businesses’.
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1.5.6 Researcher and Academicians
Researchers and scholars will benefits from the study because they will use it for future
reference and learning material when researching on the topic. For academicians, this
research finding will make a contribution towards understanding the underlying youth
entrepreneurship business start-ups.
1.6 Scope of the Study
This study was limited to factors influencing the success of youth entrepreneurship
business start-ups. The study was carried out in period of 3 months (between April 2016
to July 2016) in central Nyeri County. The primary target was youth who have undergone
the Stryde training in entrepreneurship between 18-35 years who are in the
TechnoServe’s Stryde program. Youth entrepreneurs under this study were also limited to
youth under Cohort 1 phase 2 of the Stryde training in entrepreneurship program, and not
every youth under the program. To mitigate on the study limitation, youth with diverse
business start-ups were considered, to ensure they are representative all training programs
under Techno Serve’s Stryde program.
1.7 Definition of Terms
1.7.1 Entrepreneurship Training
According to Munoz (2010), the entrepreneur is the creator, a person who builds and
rebuilds a venture, a person with a vision, who sees an opportunity and acts on it. Further
defines the entrepreneur founder as a Spartan, a person with willingness to practice self-
disciple and who becomes a technician for the dream. For this study, entrepreneurship
training was defined as imparting enterprising skills to the entrepreneur founder to enable
them achieve the dream
1.7.2 Access to Finance
Renko, Kroeck and Bullough (2012) define access to finance as the channels and
mechanisms available to the youth to gain capital funding for their business ventures,
either through low interest bank loans, low interest government loans, youth enterprise
funds, donor grants, government grants, and private sector grants.
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1.7.3 Business Development Services (BDS)
According to committee of Donor Agencies for Small Enterprise Development, (2001)
business development service are services designed to serve individual businesses that
improve the performance of the enterprise, its access to markets and its ability to
compete. This includes an array of business services such as training, consultancy,
marketing, information, business linkage promotion and technology development and
transfer. BDS encompasses both strategic medium to long term issues that improve
performance and operational day-to-day issues.
1.7.4 Opportunity versus Necessity Entrepreneurship
According to Simpson and Christensen (2009), opportunity entrepreneurship occurs when
entrepreneurs start new ventures to seize opportunities in the environment. It is common
in economies with high economic growth rates and relatively higher levels of education;
whereas necessity entrepreneurship comes about due to lack of adequate wage-
employment in the market. The entrepreneur is driven to entrepreneurship not by choice
but as a last resort.
1.7.5 Successful Youth Business Start-Ups
Osterwalder and Pigneur (2010) define successful youth business start –ups as
entrepreneurship ventures that have effectively identified a customer’s problem, found a
solution, added value, established channels to deliver this solution the customers, and as a
result, have obtained customers buy-in and commitment to the product or services in a
manner that generated sustainable revenue and profits to the business. Gries and Naudé,
(2011) on the other hand argues that successful business start-ups among the youth does
not constitute merely the ability to sell a product or service, but rather, ability to establish
a need, and provide solutions in an effective and sustainable manner.
1.8 Chapter Summary
This chapter highlights the purpose of the study as - to determine factors that influence
the success of youth entrepreneurship business startups, of youth who have been trained
by Techno Serve’s Stryde Program specifically in Nyeri County. The specific objectives
discussed in this chapter are, establish the extent youth entrepreneurship training
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influences business start-ups; the social factors that affect youth business start-ups; and
the economic factors facing youth business start-ups. Lastly this chapter discusses the
importance of the study to TechnoServe, MasterCard Foundation, the youth, the
government for policy changes and other stakeholder within the youth space.
This chapter also gives specific issues in the three specific objectives: establish the extent
youth entrepreneurship training influences business start-ups; the social factors that affect
youth business start-ups; and the economic factors facing youth business start-ups. The
third chapter presents the research methodology adopted for the study. Chapter four
provided results and findings based on research objectives. Finally, chapter five provides
the conclusion and recommendations of this study.
12
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Introduction
This chapter captures the review of related literature based on specific objectives of the
study. The specific objectives one on the extent to which youth entrepreneurship training
influences business start-ups is presented first, followed by specific objective two on how
access to finance affects the success of youth business start-ups, and finally, the study
look at how business development services affects the success of youth business start-ups.
2.2 Successful Business Start-Ups
The essence of having successful business start-ups among the youth is to ensure that
youth are not only employed, but have sufficient income to sustain their livelihoods, and
also contribute to economic development of their nation (Simpson & Christensen, 2009).
Fostering youth entrepreneurship is key policy option for most developing countries.
Globally, youth between 15 and 24 years make up 17% of the world population (OECD,
2014). In Africa, youth within the same age bracket of 15 to 24 comprise 20% of the
population. Equally, in Sub-Saharan Africa, youth are facing unemployment challenges
compared to their adult counterparts. Globally, since the 2008 financial crisis, the number
of unemployed youth reached an estimated 73.4 million, which constitutes 12.6% of the
total youth population. This is an increase of 3.5 million between 2007 and 2013.
Therefore, the efforts by government of Kenya through YEDF and NGOs to fund youth
start-ups is a quest to ensure that more youth are employed, and equally contributing to
national socio-economic development (Wanjohi & Mugure, 2008). A study carried out by
Brian and Cant (2010) in South Africa on success of youth start-ups revealed that record
keeping training have a strong positive relationship with success of youth business start-
ups, r (0.766); p ≤ 0.05. In this study, respondents were also asked to indicate whether
access to finance by youth entrepreneurs contributed to the success of youth start-ups. A
majority (82%) of respondents agreed. Equally, the study established the existence of a
strong relationship between youth entrepreneurs access to finance, and the success of
their business start-ups, r (0.786); ≤ 0.001, meaning the relationship was significant.
13
Similarly, a study conducted by ILO (2010) revealed the existence of a relationship
between Business Development Support services and the success of youth business start-
ups for OECD countries, r (0.820); p ≤ 0.05. Further, this study revealed that youth
entrepreneurs who are engaging in business start-ups do need marketing services and
sales support services for the success of their business start-ups. Equally, Fumo and
Jabbour (2011), argue that BDS services help youth entrepreneurs target of their services
to the right clients, and right market, thus enhancing the chance of turning profitable.
Equally, they argue that youth start-ups in in Mozambique that had access to BDS
services increased revenue and profitability by 60% compared to those start-ups that did
not.
2.3 Influence of Youth Entrepreneurship Training on Business Start-Ups.
2.3.1 Entrepreneurship Education
Osterwalder and Pigneur (2010) define successful youth business start –ups as
entrepreneurship ventures that have effectively identified a customer’s problem, found a
solution, added value, established channels to deliver this solution the customers, and as a
result, have obtained customers buy-in and commitment to the product or services in a
manner that generated sustainable revenue and profits to the business. As such,
entrepreneurship education is important in enhancing the success of youth business start-
ups (Adams, 2011). A study conducted by Murimi (2015) on success factors for youth
business start-ups in Nairobi county indicated that 63% of respondents indicated that
entrepreneurship education contributed to the success of youth business start-ups.
Similarly, a study conducted by Onugu (2015) in Nigeria on factors contributing to the
success of youth business start-ups revealed that quality of entrepreneurship training
offered by NGOs, the government, and development partner agencies strongly
contributed to success of youth business start-ups, r (0.788); p ≤ 0.05. The factors
explored by the study included quality of youth entrepreneurship training, the training
program, and experience of the trainers, which were all significant.
A study by Kimando (2012) on factors that influence the success of youth business start-
ups under Youth Entrepreneurship Development fund indicate that 76% of the study
respondents believed that entrepreneurship training was essential to the success of youth
business start-ups in Muranga County. Equally, 99% of the study respondents indicated
14
that entrepreneurship training has greatly improved the success of youth business start-
ups under the YEDF in Muranga.
Entrepreneurship education has recently emerged among donor organizations,
nongovernmental organizations (NGOs) and governments as one solution to address the
interrelated development challenges of unemployment and poverty in sub-Saharan Africa.
With every other body getting into entrepreneurship training, it draws attention to the
importance of developing the social supports and capabilities that can enable individuals
living in poverty to pursue entrepreneurship as a valued choice rather than a necessity in
the absence of alternative earning opportunities (Gries and Naudé, 2011).
Although entrepreneurship education programmes increasingly target poor youth, little
distinction is made between approaches designed to spur economic development through
job creation and those designed to reduce poverty and provide livelihood opportunities
(Adams, 2011). The goals of economic and business development are often conflated
with poverty alleviation and programme components may not sufficiently address
conditions that constrain entrepreneurship, particularly among marginalized youth.
Entrepreneurship education arose as a response to failures of school-to-work and
technical and vocational education and training(TVET) programmes in securing
employment for those who graduate (Magnus, 2005).
Adams (2011) contend that human capital approaches to formal education do place
emphasize the development of knowledge and skills for employment, focusing on
educational inputs, whereas recent research and policy has shifted the attention to the
creation of jobs to address a persistently high rate of educated but unemployed youth
(Heyneman, 2003; Psacharopolous, 1991). In reframing education for employment,
entrepreneurship education initiatives emphasize basic knowledge and technical skills,
entrepreneurial knowledge and skills, and access to microfinance with the desired
outcome of business and job creation, which are all essential to the success of youth
business start-ups (James-Wilson, 2008).
While entrepreneurship education is broadly directed at job creation, two distinct
approaches that guide policies and programs include opportunity entrepreneurship, which
is education for business development, and necessity entrepreneurship, which is training
for the creation of micro-enterprises and livelihood that is aimed at aimed at getting the
15
entrepreneurs out of poverty. These terms are often used in entrepreneurship educational
training to distinguish between those who pursue self-employment by choice and those
who pursue it for lack of other desirable options (Naudé, 2012).
According to Cole (1997), training is a leaning activity, which is directed towards
acquisition of specific knowledge & skills for the purpose of an occupation. It focuses on
the job task. The training can be both formal and informal and is usually carried out to
assist a person understand and perform his/her job better. On the other hand, he defines
development, as a learning activity, which is more devoted towards future, needs, rather
than present needs of the organization and is concerned with career growth and
immediate performance (Cole 1997). Armstrong (1999) concurs with Cole that training is
a systematic modification of behaviour through learning, which occurs as a result of
education and instruction. Today’s business environment can be characterized as
changing. The accelerated pace of advances in technology, increasing foreign
competition, widespread and growing unemployment creating serious adjustment
problems, and diminishing resource supplies have affected the way business is conducted
(Mbonyane & Ladzani, 2011).
2.2.1.1 Record Keeping Training
Schleberger (2013) defines records keeping as the first accounting step in
entrepreneurship or business that provides information to the business owner in terms of
financial transaction within the enterprise. Recording keeping therefore helps youth
entrepreneurs gain an understanding on inventory keeping, cash flows management,
suppliers and buyers records, and even schedule of important payables or receivables
(UNOWA, 2010). Equally, records keeping help youth entrepreneurs understand the
importance of financial performance measurements to their enterprises. It is essential as a
business person to understand whether you have a going concern or not; whether the
enterprise is profitable or not. to any business entity cannot be over-emphasized. To this
end, Shimer (2012) argues that record keeping must capture and report all the relevant
accounting information within a business enterprise.
Equally, Abov and Quartey (2010) contend that record keeping is essential in helping
youth entrepreneurship understand the importance of how economic decisions are derived
from financial reports, and as a result this understanding, enhance the success of youth
16
business start-ups. Additionally, Bartóková and Ďurčová (2013) note that record keeping
training ensures that accounting information that is important for a successful
management of any business entity is passed on to youth entrepreneurs. Maseko and
Manyani (2011) posit that youth enterprise record keeping is usually the backbone of th
business. In as much as record keeping might seem like a laborious task to many youth
entrepreneurs, it will make or break a business enterprise. Thus, the training on record
keeping is actually what creates a profitable business that makes youth financially
independent, with viable sustainable viable ventures.
According to Howard (2009) most youth enterprises do fail for lack of proper recording
keeping skills. Most youth in business start-ups usually consider record keeping as a
chore that should be avoided. As such, record keeping of stock, inventory, sales, and cash
flows is only done for purposes of getting some cash at the end of the period, and not as a
vital component of entrepreneurship start-ups. No wonder most youth start-ups fail less
than a year after start up. According to Zhou (2010), more than half of all youth start-ups
fail less than one year after commencement.
Brian and Cant (2010) conducted a study in South Africa among youth start-ups to
determine the impact of record keeping training and success of the business enterprises.
The study revealed the existence of a positive relationship between record keeping and
success of youth business start-ups in South Africa, r (0.766); p ≤ 0.05. In this study,
finance record keeping, inventory record keeping, stock record keeping, were all
statistically significant.
Brooks, Zorya, and Gautam (2012) equally note that record keeping helps increase the
chances of business survival for youth enterprise start-ups. In essence, record keeping
training is to show youth entrepreneurs how to personally get involved in day to day
management of business enterprise. To this end, Philip (2010) posit that good record
keeping is not only essential for success in business, but also for transferring life skills
that affect other spheres of life.
2.2.1.1 Finance Management Training
Financial management is one of the training in one of the essential trainings that youth in
entrepreneurship start-ups should engage. Fatoki (2012) defines of financial management
17
as the planning for financial cash flows of a business enterprise, so as to manage its
operations for the future. On the other hand, Osotimehin, Jegede, Akinlabi and Olajide,
(2012) defines financial management training as those activities in business that are
concerned with the acquisition of financial resources, allocation of those resources, and
managing utilization of the financial resource to ensure efficiency and effective use.
In youth entrepreneurship, financial management training involves planning of financial
resources which includes business cash flows, organizing payables and receivables in a
manner that enables the business to function, directing and controlling not only the cash
flows, but also but also all the financial activities of the enterprise (Radam, Abu, &
Abdullah (2008). For youth start-ups to be successful, concepts of effective financial
management must be understood by the youth. Osotimehin et al., (2012) argue that youth
entrepreneurs who have an early understanding of the importance of financial
management have a better chance of developing successful start-ups that those who don’t.
Equally, Brooks et al., (2012) contends that in most youth start-ups in Africa do no
emphasize on continuous financial training for youth start-ups. In most cases, Non-
Governmental organizations (NGOs) are the once who offer these trainings to the youth,
but since they depend on donor funding, the trainings are sometimes in consistent, or not
scheduled in time periods when these trainings might be of significance to the youth.
Having good financial training in time enables youth start-ups to engage the right
trajectory in planning and expectation, and hence, the youth are fully aware of how to
utilize their resources, what to do with profit gains, while at the same time limit and limit
the losses, so as to allow the business to grow (Davis, Dunn, & Boswell 2009).
In a study conducted by Al-Mamun, Abdul and Malarvizhi (2010) in Malaysia among
youth entrepreneurs who were engage in business startups noted that there exists a
relationship between financial training and success of youth business start-ups, r (582); p
≤ 0.05. The study looked at procurement, cash flow management, and sales. This means
that youth who receive financial training before venturing into entrepreneurship have a
higher chance of succeeding, compared to those who don’t. It is therefore imperative that
financial training curriculums be made consistent and thorough, and frequent (Fatoki,
2012).
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2.3 How Access to Finance Affects the Success of Youth Business Start-Ups
Renko, Kroeck and Bullough (2012) define access to finance as the channels and
mechanisms available to the youth to gain capital funding for their business ventures,
either through low interest bank loans, low interest government loans, youth enterprise
funds, donor grants, government grants, and private sector grants. Al-Mamun et al.,
(2010) argues that access to finance has a significant relationship with the success of
youth business start-ups. His study on youth start –ups in Malaysia revealed a strong
relationship between access to finance, and success of youth entrepreneurship start-ups, r
(0.684); p ≤ .001, meaning the relationship was significant. He concluded that
mechanisms for access to finance by the youth venturing in business start-ups should be
easily accessible, not only as a motivational factor of venturing in business start-up, but
also as a mechanism of ensuring that the start-up will be successful.
Access to finance for business has been and still is a major challenge for many business
start-ups globally. Solomon (2014) notes that every business enterprise commences as an
entrepreneurship start-up. World renown ventures like Nike, Microsoft, IMB all started
and entrepreneurship start-ups. One of the major components that enables start-ups to
bloom into full profitable business ventures. Renko, Kroeck and Bullough (2012) posit
that most youth start-ups usually face distinctive challenges particularly in trying to
access business capital, or operational finances. Youth, as it were, venture into
entrepreneurship with an idea or set of ideas. The ideas might be viable venture or not
viable, but the only way to know whether this ventures will turn profitable is by launching
their concepts as business start-ups (Al-Mamun et al., 2010)
Wanjohi and Mugure (2008) argue that most youth start-ups in Kenya lack access to
finance for entrepreneurship. However, they note that lack of access to youth start up
finance, is not unique to Kenya. Globally, lack of access to entrepreneurship finance is a
major challenge youth business start-up. Equally, Renko et al., (2012) argue that the
success of youth business start-ups in in the ability of the youth entrepreneurs to access
financing that will enable them to sustain testing of their business prototype models, and
concepts till they have a working combination that is a viable, profitable business. The
purpose of access to finances in business start-ups is to give the entrepreneurs the leeway
to test their innovative ideas and initiatives that can bring new products and services to
the market place, and thus, enhancing sustainable development.
19
The financial crisis that hit America and most European countries in 2008, caused
financial institutions globally to be more cautious in advancing credit to businesses and
individuals (Ostry, Berg & Tsangarides, 2014). As such, access to finances through
business loans has become more stringent, locking out most youth who are in need of
credit for entrepreneurial start-ups. Most youth in Africa do not own land, or other factors
of production, and usually do not have access to collateral for accessing loans, thus
making access to financing difficult (Brian, 2011). Most banks and financial institutions
regard youth business start-ups as high rick ventures, and therefore, decline to invest in
this ventures. Other major challenges faving youth access to start-up financing are
discussed below:
2.3.1 Stringent Loan Conditions
One of the challenges that youth entrepreneurs face in their quest to access business start-
up financing is stringent loan conditions. Ostry et al., (2014) argues youth entrepreneurs
rarely get favorable terms in accessing loans. Most of the times, financial institutions do
treat youth entrepreneurs same as adult entrepreneurs who have been in the business for
years. This happens mostly in regards to condition on has to fulfil to be eligible for
business loans such as having adequate collateral, having friends or family who can co-
sign the loan, and act as a guarantor among others. According to Al-Mamun et al., (2010),
stringent loan access conditions are a major deterrent to youth who desire to venture into
entrepreneurship.
Naidu and Chand (2012) equally argue that the inability for youth entrepreneurs to access
external and internal financing from banks and other financial institutions contributes to
the high failure rates of business start-ups. To enhance the success of youth business start-
ups, it is essential that conditions for loans should be within reach and affordability of
youth entrepreneurs. This assertion is collaborated by Ostry et al., (2014) study in Sub
Saharan Africa that revealed that more than 70% of youth start-ups fail in the first year
due to poor financing mechanism or lack of financing all together from the financial
institutions. The study further argues that most African youth lack collateral that is
usually required by the financial institutions to be able to approve any loan offers.
20
Wanjohi and Mugure (2008) note that in Kenya, some banks do require movable assets
that can act as collateral in cases where the youth do not have land tittle deeds, car log
books, or major equipment or property. However, this conditions are still considered ad
stringent according to youth entrepreneurs. In most cases, youth entrepreneurs venture
into business as a way of escaping poverty, and thus, do not have any moveable assets to
speak off that can be handed over to financial institutions as collateral. Similarly, lack of
substantive credit history by the youth locks them from accessing funding since their
credit worth cannot be determine, or if determined, their credit is not bankable (Ostry et
al., 2014).
Mbonyane and Ladzani, (2011) note that another challenge facing youth start-ups access
to finance is managing sales and debtors. Sales determine the cash flows the business
should be expecting over a given period of time. However, in most instances, during
startups, goods and services are sold on credit as a way of promoting the goods and
services to the market. As a result, most youth start-ups run the risk of failing to manage
sales and debtors, and as such, fail to manage their cash flows effectively. This leads to
situations where the start-ups cannot run effectively due to liquidity challenges (Renko et
al., 2012).
According to Ejembi and Ogiji (2007), youth start-ups find it problematic to run their
ventures are not able to access financing either through financial systems or through sale
of their goods and services. To address this problem, in 2009, the government of Kenya
established the Youth Entrepreneurship Development Fund (YEDPF), and the Uwezo
Fund as a way of enhancing youth access to business financing, grants and low interest
loans. By the year 2010, YEDF kitty had sufficient funds to the tune of Kshs 23 billion.
The main objective of YEDF was to enhance youth access to business financing and as a
result, increase the number of successful start-ups in youth entrepreneurship (Renko et al.,
2012).
The other objective of the YEDF was to help reduce youth unemployment by creating
approximately 200,000 new jobs (GoK, 2010). However, Solomon (2014) notes that
stringent rules that were set to manage the fund were counterproductive in youth
accessing the fuds. For instance, just like in the private sector financial systems that
required collateral and guarantors to access loan facilities, the YEDF also required
21
collateral and guarantors for the youth to access the fund. Challenge has been that these
government’s funds also request for collateral from the youth or ask them to get
guarantors equivalent to the amounts they would wish to access (Fatoki, 2012). As such,
youth entrepreneurs who were able to meet the government regulations for access to
YEDF, got funding, but, another challenge emerged; the YEDF had an initial ceiling of
Ksh. 50, 000/- which were very minimal for serious youth start-ups to conduct market
surveys, do feasibility study, product testing and prototyping. In the end, most the Ksh.
50, 000 advanced to the youth as YEDF soft loan, did not accomplish the intended
objectives. Equally, the fund attracted opportunity youth entrepreneurs instead of real
entrepreneurs, leading to enhanced cases of start-ups trial and error.
Other major challenge in access to financing by the YEDF is the fact that the youth
business start-up has to have been registered and in operations six month prior to loan
application. In this regard, most youth do abandon their ventures by the third to fifth
months, before they even fulfil the initial basic requirement by YEDF (Solomon, 2014).
In other instances, NGOs in Kenya do offer youth programs with funding, however,
NGOs depend on donor funding to be able to facilitate youth start-ups. The sense of
accountability for donor funds mean that NGOs cannot give funding to youth start-ups
until they have proven that the start-up is a viable venture (Ostry et al., 2014). The irony
inherent in this model is that NGOs and government keep encouraging the youth to
engage in entrepreneurship start-ups, yet they do not provide conducive environment for
access to finances that is critical to success of youth entrepreneurship (UNOWA, 2010).
2.3.2 Lack of Experience in Managing Business
According to Fumo and Jabbour (2011), youth start-ups entrepreneurs often lack
experience and training in management that is required for successful youth business
start-ups. As such, they do not attract successful venture capitalists and financial
institutions to invest in their ideas for their businesses. A study by Wawire and Nafukho
(2010) shows that poor start-ups management is the second most cause of youth
entrepreneurship failure in accessing external funding. Most external financiers usually
would want to look at the business management profile of the entrepreneurs to be sure
that they are able, and skilled enough to manage the financial resources that could be
advanced through their business venture. However, in most instances, as alluded to by
Brooks et al., (2012), in Africa, most youth entrepreneurs are just young people with
22
burning ideas ready to test them to see whether they will succeed. Therefore, requiring
that they should have prior management skills for them to access external funding, is an
over stretch that majority youth entrepreneurs would not be able to fulfil, however,
enhancing youth business skills through training is a sure was of guaranteeing successful
business start-ups that are also competitive and sustainable in the end.
2.3.3 High Interest Rates
According to Kinyanjui (2010), there exists a strong relationship between high interest
rates and success of youth business start-ups, (0.724); p ≤ 0.05. In a study he conducted in
Kenya among the youth entrepreneurs, his findings indicated that 70% of youth startups
that had tried to access funding when the interest rates were above 18%, did not succeed.
As such, he concluded that the issue of high interest rates charged loans for youth
entrepreneurs had made it difficult youth entrepreneurs to access financing, as and as a
result, more than 60% of youth start-ups in Kenya fail within six month of inception.
A study done by Kenya Institute for Public Policy Research and Analysis – KIPRA
(2006) equally noted that high interest rates are not conducive for youth trying to access
financing for start-ups. The study highlighted the fact that when interest rates are high, the
cost of financing the loan is high for most youth start-ups to service the loans. In this
regard, if youth do not get other channels of accessing finances other than bank loans,
their business fold just few months after they start. Kinyanjui (2010) argues that to
encourage entrepreneurs, and to enhance the success rate of youth entrepreneurship
startups, it is important that the Kenyan government should develop new mechanism
through which YEDF can be delivered to the youth at low interest rates, and minimal
regulations.
2.4 How Business Development Services Enhance Success of Youth Start-Ups.
According to Hamadi (2010) business Development Services (BDS) are defined as the
supporting services to a given business that are not core, but enables the business to thrive
and achieve its objectives. Business Development Services include marketing, training,
information communication technology (ICT), sales and promotion and access to market
According to IFC and World Bank (2011) report, business development services are
usually offered by the governmental and non-governmental organizations. The services
23
are offered in form of business support centers, business incubation hubs, ICT centers and
community development initiatives.
In a study conducted by ILO (2010) revealed the existence of a relationship between BDS
the success of youth business start-ups for OECD countries, r (0.820); p ≤ 0.05. The study
further revealed that marketing services and sales services ranked the most significant for
the success of youth start-ups. Equally, Fumo and Jabbour (2011), argue that BDS
services help youth entrepreneurs target of their services to the right clients, and right
market, thus enhancing the chance of turning profitable. Equally, they argue that youth
start-ups in in Mozambique that had access to BDS services increased revenue and
profitability by 60% compared to those start-ups that did not. However, Hamadi (2010)
argues that BDS services are only as helpful to the success of youth entrepreneurs,
depending on the dedication, commitment and knowledge of youth on the ventures they
are engaging in. Further, he argues that when youth entrepreneurs engage in start-ups they
have not modeled well, or conducted market survey to assured of market need, no amount
of BDS can save the enterprise.
Fatoki (2012) notes that most youth start-ups fail to succeed because they substitute BDSs
for viable entrepreneurship concepts. Further, he adds that for any youth start up to
succeed, the emphasis should not be placed on marketing, or sales, or ICT channels for
the product, but rather, on developing a viable concept that solves a current problem in
the market place. To this end, Brooks et al., (2012) note that the major challenges facing
youth entrepreneurship start-ups is lack of proper problem articulation in developing
viable start-ups and as such, attempts to do aggressive marketing or other forms of BDS
fails to rescue a start-up that is already on a failing trajectory.
According to John (2012), BDS can be classified based on objective of the service that
the BDS intents to achieve. For instance, if the purpose of a youth start-up is to enhance
access to new markets, then marketing BDS will be targeted. If the objective is to
enhance sales, then sales BDS will be targeted. However, if the objective is to enhance
online presence of start-up services, the ICT BDS will be targeted. Similarly, Ostry et al.,
(2014) note that the purpose of BDS is to transform viable entrepreneurship concepts into
winning sustainable business through enhanced awareness of the business services, and as
such, ensure the success of youth business start-ups.
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2.4.1 Marketing Support Services
Marketing services are important component towards the success of youth
entrepreneurship start-ups (Gaddefors & Anderson, 2008). According to Njoroge and
Gathungu (2013) marketing in entrepreneurship involves segmentation, targeting and
positioning of business products and services to an appropriate buyer. It is important that
youth entrepreneurs identify and understand specific group of customers that are critical
to the success of youth business start-ups (Al-Mamun et al., 2010). Marketing support
services helps youth entrepreneurs to be able to not only segment customers critical to the
success of their business start-up, but also, but also collect feedback from this set of
customers to further enhance product and service development.
Equally, John (2012) note that one of the major challenges with youth start-ups is lack of
proper segmentation of proper type and kind of customers who are essential to their
survival. As such, most youth entrepreneurs expend their time and resources marketing to
everyone who would care to listen to them concerning their ventures. However, the
problem inherent in this marketing strategy is that vital resources are expended on people
who are users, and not customers. Osterwalder and Pigneur (2010) define a product user,
as a consumer of a product or service because it was available, while a customer as
individuals who have a total buy-inn into a product and services, and become converted
regular consumers of the product.
According to Rahmati (2010) youth entrepreneurship start-ups need marketing support
survives either from governmental departments, non-governmental institutions, and donor
agencies. Non-governmental organizations are essential in connecting your entrepreneurs
to marketing training and expertise that make youth products and services attractive, and
available to the right markets. However, Osterwalder and Pigneur (2010) posit that most
governmental departments and non-governmental organizations that help youth
entrepreneurs do not sufficient understanding who the customers’ youth entrepreneurs are
trying to target. Failure to understand this critical information, usually leads in situations
where NGOs provide marketing support services, but targeting the wrong customers. Any
time there is lack of clarity on who true customers are, there is a high chance that
marketing and targeting will be focused on wrong clients.
25
When marketing supposed services is done right, targeting right clients, youth start-ups
tend to grow and succeed (OECD, 2012). Similarly, Gaddefors and Anderson (2008)
contend that when market support services for youth entrepreneurs is done right, market
profile segmentation on demographic, psychological, and even buyer behavior is known,
and documented for targeted marketing. In market support services, marketing helps
youth entrepreneurs identify and evaluate the attractiveness of each customer segment in
line with their desire and willingness to buy start-up goods and services (Rahmati, 2010).
Marketing support services also help youth entrepreneurs to also help youth entrepreneurs
understand how to four P’s (Price, Place, Promotion, and product) of marketing work
(Berger & Udell, 2011). Gaddefors and Anderson (2008) argue that if entrepreneurs do
not understand how to price their products that are entering into the market, they run the
risk of overpricing or underpricing which eventually hurts the business. Equally, Renko et
al., (2012) content that lack of proper pricing mechanism significantly contributes to lack
of success for youth business start-ups. The essence of marketing support services is to
ensure that youth entrepreneurs have adequate information about the market, the pricing,
and the customer behaviors. Youth entrepreneurs who master the right balance for price,
place, promotion, and product, have a 70% chance of succeed, all other factors constant,
compared to those who do not (Gries & Naudé, 2011).
2.4.2 Information Communication and Technology Services
Information Communication and Technology services are essential component for
enhancing the success of youth business start-ups. A study conducted by Okten and
Okonkwo (2011) in Indonesia revealed the existence of a relationship between ICT and
success of youth entrepreneurship start-ups, r (0.564); p ≤ 0.05. The study examined how
youth entrepreneurs utilized information technologies to conduct product awareness, and
even to do online sales. Social media platforms like facebook was contributed
significantly in spreading information concerning the entrepreneurship product and
services to friends, who shared with other friends within their circle, thus, enhancing
product promotion at minimal cost. Similarly, the study found that youth entrepreneurs
who had received training on how to use social media ICT platforms were 68% successful
26
compared to youth who had not received training on how to use social media ICT to
enhance product and service awareness.
According to Renko et al., (2012) and Ejembi and Ogiji (2007), NGOs place a critical
role in training youth start-ups on the importance of ICT platforms. Trainings on website
development, or how to conduct online sales or advertising is very important to the
success of youth entrepreneurship start-ups. Websites for instance help provide
information concerning the products and services that the entrepreneurs are offering. In
most instances, when a website had a well-managed and optimized content through
search engines, it receives more traffic to the site, which in turn can translate in increased
interest in the products and services entrepreneurs are offering through the site (Gries &
Naudé, 2011). It is therefore important that youth entrepreneurs understand the
significance of ICT in enhancing success of their enterprises (Renko et al., 2012)
2.4.3 Sales and Promotion Services
According to Nieman and Neuwenhuizen (2010) the success of entrepreneurship ventures
is significantly dependent on the ability to sale the products and services. to concentrate.
Berger and Udell (2011) define sales in entrepreneurship as the act of exchanging
entrepreneurship products and services for revenue, while promotion is the act of creating
awareness about a given product or services in the market. Increase in sales enhances
financial position of an entrepreneurship venture, while promotion creates awareness
concerning the use, and usefulness of the products and services.
According to Rita & Fernald (2012) it is incumbent upon youth entrepreneurs to ensure
that they have done sufficient market survey for their products and services, to be able to
know who to target for sales, and who to conduct promotions, or give offers to. In
entrepreneurship start-ups, the success of the venture is sometime predicated upon a well-
coordinated sales and promotion strategy. Gries and Naudé (2011) argue that the success
of youth business start-ups sometimes depends on effective sales and promotions,
including giving out free products and services as a way of creating awareness. However,
giving free services as a way of introducing a product is not in itself a guarantee for
success, rather, targeting the right market, right potential customers at the right time, with
the right product.
27
Osterwalder and Pigneur (2010) posit that in sales and promotion for entrepreneurship,
developing a well-constructed elevator pitch is the ultimate necessity for getting potential
clients interested on an entrepreneurs’ products. They define an elevator pitch as a
statement the describes what a product or service is, the problem the product and service
is trying to solve so as to eliminate a customer’s pain, and the potential long term
benefits. Therefore, training youth entrepreneurs on how to develop and deliver good
elevator pitches enhances the probability that they will make a sell. To this end, Gries and
Naudé (2011) posits that sales and promotion services from NGOs and other development
agencies are essential in helping youth entrepreneurs establish a foundation from which
they can launch successful ventures.
2.5 Chapter Summary
This chapter has presented literature review based on specific objectives of the study. The
specific objectives on the extent to which youth entrepreneurship training influences
business start-ups was presented first, followed by how access to finance affects the
success of youth business start-ups, and finally, the chapter also has examined how
business development services affect the success of youth business start-ups. The next
chapter 3 presents the study methodology.
28
CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 Introduction
The research design for this study is discussed in this chapter. In identifying factors that
influence the success of youth entrepreneurship in business start-ups, the study has
identified the population and the sampling design to come up with a representative
sample. This involved identifying a sampling frame from which the sample is to be
drawn. The chapter also states the sampling technique and the sample size. Finally, this
chapter presents research procedures, data collection methods, and data analysis methods
that have been adopted for the study.
3.2 Research Design
Copper and Schindler (2014) defines research design as the blue print for the research
process. It shows exactly how the study will be conducted in technical terms; it elaborates
how the researcher will conduct sample selection, the data collection instruments that will
be used and research procedures among other specific tasks. Cox and Hassard (2010) on
the other hand define research design as clearly defined structures within which a
research study is implemented. This study adopted a descriptive research design, which
involves direct exploration, analysis and description of particular phenomena as free as
possible from unexplained presumptions, aiming at maximum intuitive presentations
(Copper and Schindler, 2014). According to Saunders, Lewis and Thornhill (2009),
descriptive design is used to document a study phenomenon in its real situation, without
the interference of the researcher. This design enabled the researcher to identify and
describe characteristics of the study population, and their relationships.
3.3 Population and Sampling Design
3.3.1 Population
Copper and Schindler (2014) define population as the total collection of elements about
which the researcher wishes to make inferences. This study will be interested in making
inferences about youth aged between eighteen to thirty in Nyeri County, Kenya, who
have undergone through the TechnoServe’s Stryde entrepreneurship training and have
29
started off businesses. The population of this study consisted of 410 youth under
TechnoServe’s Stryde entrepreneurship training program in phase two, cohort one youth
beneficiaries in Nyeri County, Kenya. Population distribution is indicated in Table 3.1.
Table 3.1: Population Distribution
Cluster: Nyeri County Population % Distribution
Kieni sub county 82 20%
Tetu sub county 82 20%
Mathira sub county 82 20%
Mukurwe-ini sub county 82 20%
Othaya sub county 82 20%
Total 410 100%
Source: TechnoServe (2016)
3.3.2 Sampling Design
Mugenda and Mugenda (2012) define a sampling design as the framework of guide that
helps determine how study samples will be determined from a study population. On the
other hand, Saunders et al., (2009) define sampling design as the procedure or process or
technique that is used by a researcher to pick a sub group from a population to participate
in the study. The subgroup is carefully selected so as to be representative of the whole
population with the relevant characteristics. Each member or case is referred to as a
subject, a respondent.
3.3.2.1 Sampling Frame
According to Cooper and Schindler (2014), a sampling frame is a list of all elements from
which the sample will be drawn. This study adopted TechnoServe Stryde Program
graduate database from phase two cohort one beneficiaries, as a sampling frame to
identify the youth who have started start-ups.
3.3.2.2 Sampling Technique
The sampling technique is the specific process by which the entities of the sample are
selected (OECD, 2012). This study adopted a clustered sampling, and random sampling
technique to pick the study sample. Clustered sampling was used because youth
entrepreneurs under this program are not homogeneous, but rather, heterogeneous. This
30
means that they possess different entrepreneurship ventures in different sectors, therefore
experience different divides a heterogeneous population into distinct categories
challenges or successes in their entrepreneurship venture. Types of youth start-ups were
put into stratums of independent sub population from which individual elements can be
randomly selected. Mugenda et al., (2012) defines random sampling technique as a
method that gives elements within a study population or stratums an equal chance of
being sampled.
3.3.2.3 Sample Size
A sample size comprises a group of respondents, consisting of part of the target
population carefully selected to represent that population (Cooper & Schindler (2014). To
determine the sample size, Krejcie and Morgan (1970) formula was used to come up with
a sample size of 196, computed as follows:
S = X2NP (1-P) / d2 (N-1) + X2 P (1 – P)
S = required sample size
X2 = the table values of chi-square for 1 degree at the desired confidence level
(3.841)
N = the population size
P = the population proportion (assumed to be .50 since this would provide the
maximum sample size)
d = the degree of accuracy expressed as a proportion (.50)
Sample size = 3.841 *410 *.50(1-.50) / {(.052 (504 - 1) + 3.841*.50(1-.50)}
= 196
Table 3.2: Sample Size Distribution
Clustered: Nyeri County Population Sample Size Sample Size
Distribution
Kieni sub county 82 16 20%
Tetu sub county 82 16 20%
Mathira sub county 82 16 20%
Mukurwe-ini sub county 82 16 20%
Othaya sub county 82 16 20%
Total 410 196 100%
31
Source: (TechnoServe, 2016)
3.4 Data Collection Methods
The study utilized only primary collected from the field. Copper and Schindler (2014)
defines primary data as original search where data being collected is designed specifically
to answer the research questions. The researcher used structured interview questionnaires
to collect primary data. The questionnaire was administered by the researcher and
research assistants. The questionnaire was divided into three sections. The first section
captured the biodata of the youth participants. The second and third sections enabled to
estimate the proportions of youth population that have access to finance, the business
mentorship they have received and whether the entrepreneurship training enables them be
successful in starting up businesses. The attached questionnaire has the Likert scale
questions.
3.5 Research Procedures
A pilot test was conducted using at least ten respondents to the sample population
selected using random sampling approach. The results from the pre-test were analysed
using the statistical program for social sciences (SPSS) to establish the internal
consistency of the items in each of the independent variables. The pilot was also used to
test reliability and validity of the study instrument.
The research begun by seeking approval from TechnoServe Stryde program to conduct a
research on their trained youth. This enabled in the researcher getting the sample frame
which advised on the one hundred youth to be sampled based on the parameters of the
study. This was then followed by cold calling a few of the respondents in the sample to
establish their existence, and later set up appointments to meet the respondents and
administer the questionnaire face to face. The data collected was then be coded and
entered into the statistical program for social sciences (SPSS) to determine findings.
3.6 Data Analysis Methods
Data analysis is the process of bringing order, structure and meaning to the mass of
information collected in a research (Mugenda et al (2012). The quantitative data was
analyzed using descriptive and inferential statistics provided by the statistical program for
32
social sciences (SPSS) to generate the required frequencies and percentages that was
interpreted to answer the research questions. Inferential analysis included correlations and
regressions between youth entrepreneurship training, access to finance, business
development services and the success of youth business start-ups. Correlation was used to
determine whether there exists any relationship between the variables. Regression
analysis was used to test the level of significance for the relationship. The findings of the
study have been presented using tables and figures.
3.7 Chapter Summary
This chapter has presented the study methodology that was adopted for the study. The
descriptive research has been adopted as the study research design. The researcher was
also able to identify the population as 410 youth entrepreneurs under TechnoServe’s
Stryde entrepreneurship training program, phase two, cohort one beneficiaries. The
stratified and random sampling techniques have also been presented as the study sampling
techniques. Data collection was conducted using a closed ended structured questionnaire.
The research procedures included seeking permissions from TechnoServe’s to carry out
the study, and also conducting a pilot test to determine reliability and validity. Data was
analyzed for descriptive and inferential statistics using Statistical Packages for Social
Sciences (SPSS). The study findings were presented using tables and figures. The next
Chapter 4 presents study results and findings.
33
CHAPTER FOUR
4.0 RESULTS AND FINDINGS
4.1 Introduction
This chapter presents the results and findings based on the study specific objectives. The
findings the influence of youth entrepreneurship training is presented first. This is
followed by the findings on how access to finance influences success of youth
entrepreneurs, and finally how business development services influence success of youth
entrepreneurship services. This study had a sample size of 196 respondents. Out of the
196 questionnaires that were given out, and 150 were received back, making a 77%
response rate.
4.1.1 Reliability Analysis
A pilot test was conducted to determine the reliability for the questionnaire tool. For a
study to be reliable, it has to yield a Cronbach Alpha value above 0.6. When a reliability
analysis was conducted for this study, a Cronbach Alpha value of 0.814, and thus the
study tool was reliable as indicated in table 4.1
Table 4.1: Reliability Analysis
Areas of Analysis Items Cronbach's Alpha
Success of Youth
Entrepreneurs 6 .846
Entrepreneurship Education 13 .822
Access to Finance 11 .790
Business Development
Services 12 .798
Average
0.814
4.2 Demographic Data
The demographic data of this study included gender of the respondents, age, level of
education, marital status, and area of entrepreneurship.
34
4.2.1 Respondents Gender
The findings of this study show that 62% of respondents were male, while 38% were
female as indicated in figure 4.1 below
Figure 4.1: Respondents Gender
4.2.2 Respondents Age
Figure 4.2 below shows the respondents age. The findings of the study revealed that
respondents aged 27-30 years were the majority (44%), followed by those aged 18-21% at
24%, those aged 31-35 years were 17%, while those aged 23-26 years were 15%
Figure 4.2: Respondents Age
62%
38% Male
Female
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
18-21 Years 23-26 Years 27-30 Years 31-35 Years
24%
15%
44%
17%
35
4.2.3 Respondents Level of Education
The findings of the study show that 44% of respondents had college education, followed
by 32% who had secondary level education, then 18% who had university education, and
finally 6% who had primary level education as indicated in figure 4.3.
Figure 4.3: Respondents Level of Education
4.2.4 Marital Status
The findings of this study show that 78% of respondents were single, while 22% were
married, as indicated in figure 4.4.
Figure 4.4: Respondents Marital Status
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Primary Secondary College University
6%
32%
44%
18%
78%
22%
Single
Married
36
4.2.5 Location of Entrepreneurship
When respondents were asked to indicate location of entrepreneurship, 52% indicated
agriculture, 21% retail shop, 20% sales and marketing, while 7% said they operate retail
shops as indicated in figure 4.5.
Figure 4.5: Location of Entrepreneurship
4.3 Entrepreneurship Training and Success of Youth Business Start-Ups
Respondents of the study were asked to indicate whether youth entrepreneurship training
had an influence on youth business start-ups. On the question on whether respondents had
received education under TechnoServe Stryde program, 67% strongly agreed, 13%
disagreed, 10% agreed, while another 10% strongly disagreed. On the question on
whether entrepreneurship education had contributed to success of respondent’s start-ups,
50% of the respondents agreed, 25% strongly agreed, 12% strongly disagreed, 9%
disagreed, while 3% remained neutral. On whether the training objective was met, 41% of
respondents agreed, 39% strongly agreed, 8% disagreed, 7% strongly disagreed, while
5% remained neutral. When asked whether the trainer was knowledgeable enough, 56%
agreed, 25% strongly agreed, 10% disagreed, 5% strongly disagreed, while 4% remained
neutral. Similarly, on the question on whether the training content was sufficient to make
start-ups succeed, 45% agreed, 36% strongly agreed, while 9% disagreed and strongly
disagreed respectively. When asked whether they would recommend the training to other
start-ups, 64% strongly agreed, 23% agreed, 7% disagreed, 3% remained neutral, and
strongly disagreed respectively. When respondents were asked whether they had received
0%
10%
20%
30%
40%
50%
60%
ICT Agriculture Sales &
Marketing
Retail Shop
7%
52%
20% 21%
37
record keeping training, 53% agreed, 30% strongly agreed, 7% strongly disagreed and
agreed respectively, while 3% remained neutral. On the question on whether record
keeping was essential for business start-ups, 48% agreed, 22% strongly agreed, 11%
strongly disagreed, 9% disagreed, while 5% remained neutral. When asked whether
record keeping had help respondents start-ups succeed, 45% strongly agreed, 37% agreed,
13% disagreed, while 5% strongly disagreed. When respondents whether they had
received finance management training, 49% agreed, 29% strongly agreed, 10% strongly
disagreed, 7% remained neutral, while 5% disagreed. Finally, on whether financial
management training is essential for success of start-ups, 52% agreed, 31% strongly
agreed, 8% disagreed, 5% strongly disagreed, while 3% remained as indicated in table
4.2.
Table 4.2: Entrepreneurship Training
Statement
Distribution Strongly
Disagree
Disagree Neutral Agree Strongly Agree
f % f % f % f % F %
You have received education
under TechnoServe Stryde
Program
15
10%
20
13%
-
-
15
10%
100
67%
Entrepreneurship Education
has contributed to success of
your business
18
12%
14
9%
5
3%
75
50%
38
25%
Was the training objective met 10 7% 12 8% 8 5% 62 41% 58 39%
Was the trainer
knowledgeable enough
7
5%
15
10%
6
4%
84
56%
38
25%
Was the training content
sufficient to make you
succeed as an entrepreneur
14
9%
14
9%
-
-
68
45%
54
36%
Would you recommend this
training to other youth start
ups
5
3%
10
7%
5
3%
34
23%
96
64%
You received Record Keeping
Training
10
7%
11
7%
4
3%
80
53%
45
30%
Recording Keeping is
essential for success of Youth
start-ups
16
11%
14
9%
8
5%
72
48%
40
27%
Record Keeping has helped
your start-up to succeed
7
5%
20
13%
-
-
55
37%
68
45%
You have received finance
management training
15
10%
7
5%
10
7%
74
49%
44
29%
Finance management training
is essential for start-ups
8
5%
12
8%
5
3%
78
52%
47
31%
38
4.4 Access to Finance and Success of Youth Business Start-Ups
4.4.1 Initial Start-Up Capital
Respondents of this study were asked to indicate how they obtained their initial capital for
their business start-ups. The findings show that 30% got start-up capital from youth fund,
28% from personal savings, 18% from family support, 17% from TechnoServe seed
capital, while 7% got a bank loan as highlighted in figure 4.6.
Figure 4.6: Initial Start Up Capital
4.4.2 Hindrances on Access to Capital
Respondents of this study were also asked to indicate the hindrances they had uncounted
in access to business start-up capital. The findings show that 44% indicated lack of
collateral was main hindrance, 38% indicated cumbersome procedures, 10% lack of
business plan, 8% indicated that low loan amount was the main hindrance as indicated in
figure 4.7.
28%
7%
18%
30%
17%
0% 5% 10% 15% 20% 25% 30% 35%
PERSONAL SAVINGS
BANK LOAN
FAMILY SUPPORT
YOUTH FUND
TECHNOSERVE SEED CAPITAL
39
Figure 4.7: Hindrances on Access to Capital
4.4.3 Access to Loans Has Stringent Conditions for Youth Start-Ups
Respondents of the study were asked to indicate whether they felt that access to loans for
youth start-ups had stringent conditions. The findings 73% agreed, 19% strongly agreed,
11% strongly disagreed, while 4% disagreed as indicated in table 4.3.
Table 4.3: Access to Loans Has Stringent Conditions for Youth Start-Ups
Scale Frequency Percentage
Strongly Disagree 16 11%
Disagree 6 4%
Neutral 0 0%
Agree 110 73%
Strongly Agree 28 19%
Total 150 100%
4.4.4 Stringent Loan Hinder the Success of Youth Business Start-Ups
On the question on whether stringent loan conditions do hinder youth access to business
start-ups, 47% of respondents agreed, 42% strongly agreed, 7% disagreed, while 5%
remained neutral as highlighted in table 4.4.
44%
10%
8%
38%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
LACK OF COLLATERAL
LACK OF BUSINESS PLAN
LOW LOAN AMOUNT
CUMBERSOME PROCEDURES
40
Table 4.4: Stringent Loan Hinder the Success of Youth Business Start-Ups
Scale Frequency Percentage
Strongly Disagree 7 5%
Disagree 10 7%
Neutral 0 0%
Agree 70 47%
Strongly Agree 63 42%
Total 150 100%
4.4.5 Stringent Loan Conditions Should Be Abolished to Access to Finance
When respondents were asked whether they believed that stringent loan conditions should
be abolished, 51% of respondents strongly agreed, followed by 37% who agreed, then
10% who disagreed, 5% who strongly disagreed, and 4% who remained neutral as
highlighted in table 4.5.
Table 4.5: Stringent Loan Conditions Should Be Abolished to Access to Finance
Scale Frequency Percentage
Strongly Disagree 7 5%
Disagree 15 10%
Neutral 6 4%
Agree 58 37%
Strongly Agree 76 51%
Total 150 100%
4.4.6 Training Has Enhanced Your Business Experience
Respondents were asked to indicate whether training had enhanced their business
experience. The findings show that 62% of respondents agreed that training had enhanced
their business experience, 21% strongly agreed, 9% disagreed, 3% remained neutral while
2% strongly disagreed as indicated in table 4.6.
41
Table 4.6: Training Has Enhanced Your Business Experience
Scale Frequency Percentage
Strongly Disagree 3 2%
Disagree 14 9%
Neutral 5 3%
Agree 93 62%
Strongly Agree 32 21%
Total 150 100%
4.4.7 Lack of Business Experience Hinders Access to Finance
This study sought to determine whether lack of business experience hindered youth
access to start-up finance. The findings show that 54% of respondents agreed that lack of
business experience hindered them from accessing start-up finance, 27% strongly agreed,
7& disagreed, 3% strongly disagreed, while another 3% remained neutral as indicated in
table 4.7.
Table 4.7: Lack of Business Experience Hinders Access to Finance
Scale Frequency Percentage
Strongly Disagree 4 3%
Disagree 10 7%
Neutral 5 3%
Agree 81 54%
Strongly Agree 40 27%
Total 150 100%
4.4.8 Lack of Experience Should Not Hinder Access to Finance
Respondents were asked to indicate whether lack of finance should hinder youth access to
finance. The findings show that 51% agreed that lack of business experience should not
hinder youth access to finance, 37% strongly agreed, 5% strongly disagreed, while 3%
disagreed and remained neutral respectively as indicated in table 4.8
42
Table 4 8: Lack of Experience Should Not Hinder Access to Finance
Scale Frequency Percentage
Strongly Disagree 8 5%
Disagree 5 3%
Neutral 5 3%
Agree 77 51%
Strongly Agree 55 37%
Total 150 100%
4.4.9 Currently Interest Rates for Loans on Youth Start-Ups Are High
Respondents of this study were asked to indicate whether they believed that the current
interest rates were high for youth start-ups to succeed. The findings indicate that 47% of
respondents strongly agreed that the current interest rates were high for youth start-ups to
succeed. Equally, 36% or respondents agreed, 8% disagreed, 6% remained neutral, while
3% strongly disagreed as indicated in table 4.9.
Table 4.9: Currently Interest Rates for Loans on Youth Start-Ups Are High
Scale Frequency Percentage
Strongly Disagree 4 3%
Disagree 12 8%
Neutral 9 6%
Agree 54 36%
Strongly Agree 71 47%
Total 150 100%
4.4.10 High Interest Rates Hinders the Success of Youth Start-Ups
This study equally sought to determine whether high interest rates hindered the success of
youth start-ups. The findings show that 64% of respondents strongly agreed, 21% agreed,
9% disagreed, while 6% strongly disagreed as highlighted in table 4.10.
43
Table 4.10: High Interest Rates Hinders the Success of Youth Start-Ups
Scale Frequency Percentage
Strongly Disagree 9 6%
Disagree 13 9%
Neutral 0 0%
Agree 32 21%
Strongly Agree 96 64%
Total 150 100%
4.5 Business Development Services and Success of Youth Business Start-Ups
4.5.1 Type of Institutions that Provide Business Development Services
Respondents of this study were asked to indicate the type of institution they accessed for
provision of business development services. The findings indicate 56% of respondent’s
access business development services from NGOs, 37% from government, 5% from
banks, and 2% from chamber of commerce as indicated in figure 4.8
Figure 4.8: Type of Institutions that Provide Business Development Services
4.5.2 Challenges Facing Marketing of Youth Start-Up Products
This study sought to determine the kind of challenges that youth start-ups face in
marketing their products. The findings show that 32% have challenges with high market
37%
56%
2%
5%
G O V E R N M E N T
N G O S
C H A M B E R O F C O M M E R C E
B A N K S
44
costs, 30% with stiff competition, 24% poor business location, and 14% have challenges
with low product demand as indicated in figure 4.9.
Figure 4.9: Challenges Facing Marketing of Youth Start-Up Products
4.5.3 You Have Marketing Services for Your Goods Services
When respondents were asked whether they have marketing services for their products,
52% agreed, 27% strongly agreed, 11% strongly disagreed, 7% disagreed, while 3%
remained neutral as indicated in table 4.11
Table 4.11: You Have Marketing Services for Your Goods Services
Scale Frequency Percentage
Strongly Disagree 17 11%
Disagree 10 7%
Neutral 5 3%
Agree 78 52%
Strongly Agree 40 27%
Total 150 100%
0%
5%
10%
15%
20%
25%
30%
35%
Stiff
Competition
Poor Location Low Demand High Market
Cost
30%
24%
14%
32%
45
4.5.4 Marketing Support Services is Important to the Success of Youth Start-Ups
On the question on whether marketing services were important to the success of youth
business start-ups, 48% of respondents agreed that marketing of their products is
important to success of their products, 40% strongly agreed, 7% strongly disagreed, while
5% disagreed as highlighted in table 4.12.
Table 4.12: Marketing Support Services is Important to Youth Start-Up Success
Scale Frequency Percentage
Strongly Disagree 10 7%
Disagree 8 5%
Neutral 0 0%
Agree 72 48%
Strongly Agree 60 40%
Total 150 100%
4.5.5 Marketing Services Should Be Part of Entrepreneurship Training
On the issue of whether marketing services should be part of entrepreneurship training,
53% of respondents agreed, 35% strongly agreed, 5% disagreed, 4% remained neutral,
while 3% strongly disagreed as highlighted in table 4.13.
Table 4.13: Marketing Services Should Be Part of Entrepreneurship Training
Scale Frequency Percentage
Strongly Disagree 4 3%
Disagree 8 5%
Neutral 6 4%
Agree 80 53%
Strongly Agree 52 35%
Total 150 100%
46
4.5.6 Your Business Connections help You Market Your Products
Respondents were asked whether they have business connections that help them market
their products, 57% agreed, 27% strongly agreed, 7% strongly disagreed, 7% disagreed,
while 3% remained neutral as indicated in table 4.14.
Table 4.14: Your Business Connections help You Market Your Products
Scale Frequency Percentage
Strongly Disagree 10 7%
Disagree 10 7%
Neutral 5 3%
Agree 85 57%
Strongly Agree 40 27%
Total 150 100%
4.5.7 You Have Received Support Services on Use of ICT
When respondents were asked whether they have received support services on how to use
ICT, 44% strongly agreed, and agreed respectively, 8% disagreed, 7% strongly disagreed,
while 3% remained neutral as indicated in table 4.15 below.
Table 4.15: You Have Received Support Services on Use of ICT
Scale Frequency Percentage
Strongly Disagree 10 7%
Disagree 12 8%
Neutral 4 3%
Agree 66 44%
Strongly Agree 66 44%
Total 150 100%
47
4.5.8 ICT Services Enables You to Reach Clients Quickly
On the question on whether ICT services enabled respondents to reach their clients
quickly, 55% of respondents strongly agreed, 32% agreed, 5% remained neutral, another
5% strongly disagreed, while 3% disagreed as indicated in table 4.16.
Table 4.16: ICT Services Enables You to Reach Clients Quickly
Scale Frequency Percentage
Strongly Disagree 8 5%
Disagree 5 3%
Neutral 7 5%
Agree 48 32%
Strongly Agree 82 55%
Total 150 100%
4.5.9 ICT Services Are Essential for the Success of Your Start-Up
Respondents were asked to indicate whether ICT services were essential for the success
of their start-ups. The findings show that 48% of respondents agreed, 38% strongly
agreed, 8% strongly disagreed, while 6% remained neutral as indicated in table 4.17
Table 4.17: ICT Services Are Essential for the Success of Your Start-Ups
Scale Frequency Percentage
Strongly Disagree 12 8%
Disagree 0 0%
Neutral 9 6%
Agree 72 48%
Strongly Agree 57 38%
Total 150 100%
4.5.10 You Have Received Sales and Promotion Support through TechnoServe
When respondents were asked on whether they had received sales and promotion support
services from TechnoServe trainings, 65% of respondents agreed, 20% disagreed, 9%
disagreed, 3% remained neutral, while 2% strongly disagreed as indicated in table 4.18.
48
Table 4.18: You Have Received Sales and Promotion Support Through TechnoServe
Scale Frequency Percentage
Strongly Disagree 3 2%
Disagree 14 9%
Neutral 5 3%
Agree 98 65%
Strongly Agree 30 20%
Total 150 100%
4.5.11 Sales and Promotion Makes your Products Known to Clients
On the question on whether sales and promotion had made respondents products know to
clients, 42% strongly agreed, 39% agreed, 7% remained neutral and disagreed
respectively, while 5% strongly disagreed as highlighted in table 4.19.
Table 4.19: Sales and Promotion Makes your Products Known to Clients
Scale Frequency Percentage
Strongly Disagree 7 5%
Disagree 10 7%
Neutral 11 7%
Agree 59 39%
Strongly Agree 63 42%
Total 150 100%
4.5.12 Sales and Promotion is Essential for Success of Your Start-Up
When asked whether sales and promotion is essential for respondent’s business start-up,
52% of respondents agreed, 27% strongly agreed, 11% strongly disagreed, 7% disagreed,
while 3% remained neutral as indicated in table 4.20.
49
Table 4.20: Sales and Promotion is Essential for Success of Your Start-Up
Scale Frequency Percentage
Strongly Disagree 17 11%
Disagree 10 7%
Neutral 5 3%
Agree 78 52%
Strongly Agree 40 27%
Total 150 100%
4.6 Success of Youth Business Start-Ups
Respondents of this study were asked to indicate believed constituted success of youth
business start-ups. When respondents were asked if their businesses were registered, 64%
agreed, 19% strongly agreed, 11% disagreed, 3% strongly disagreed and remained neutral
respectively. When respondents were asked if they keep business records, 49% strongly
agreed, 37% agreed, 8% disagreed, while 5% remained neutral. On the question on
whether respondents had attended an entrepreneurship training, 42% strongly agreed,
41% agreed, 7% disagreed and strongly disagreed respectively, while 3% remained
neutral. Respondents were also asked to indicate whether they find stringent rules in
access to bank loans, 50% strongly agreed, 29% agreed, 8% strongly disagreed, 7%
disagreed, while 6% remained neutral. When respondents were asked if they use
marketing support services for their business start-ups, 52% strongly agreed, 28% agreed,
12% remained neutral, 5% strongly disagreed, while 3% disagreed that they use
marketing services to market their services. Finally, when respondents were asked to
indicate whether they use sales and promotion services to enhance sales for their start-up
products. The findings show that 45% agreed to use sales and marketing services, 19%
strongly agreed, 19% remained neutral, 10% disagreed, while 7% strongly disagreed as
indicated in table 4.21.
50
Table 4.21: Success of Youth Business Start-Ups
Statement
Distribution
Strongly
Disagree
Disagree Neutral Agree Strongly
Agree
f % f % f % f % F %
Your business is
registered
5
3%
16
11%
5
3%
96
64%
28
19%
You keep adequate
business records
8
5%
12
8%
-
-
56
37%
74
49%
You have attended
entrepreneurship
training
10 7% 10 7% 5 3% 62 41% 63 42%
You find access to loans
very difficult due to
stringent bank rules
12 8% 10 7% 9 6% 44 29% 75 50%
You use marketing
support services for your
business
7 5% 5 3% 18 12% 42 28% 78 52%
You use sales and
promotion services to
enhance sales for your
business
11 7% 15 10% 28 19% 68 45% 28 19%
4.7 Correlation Analysis
To determine whether there existed any relationship between entrepreneurship training,
access to finance, business development services and success of youth business start-ups,
a correlation analysis was conducted. The findings show that access to finance had the
strongest relationship with success of business start-ups, r (0.812); ≤ 0.01. This was
followed by relationship between business development services and success of business
start-ups, r (0.784); ≤ 0.01, and finally the relationship between youth entrepreneurship
training and success of business start-ups, r (0.748); ≤ 0.01 as highlighted in table 4.22.
51
Table 4. 22: Correlation Analysis
Statements 1 2 3 4 5
Success of Youth
Business Start-Ups
Pearson’s
Correlation
1
Sig (2 tailed) .000
Entrepreneurship
Training
Pearson’s
Correlation .748** .624*
1
Sig (2 tailed) .000 .050
Access to Finance Pearson’s
Correlation .812** .772** .708*
1
Sig (2 tailed) .000 .010 .040
Business
Development
Services
Pearson’s
Correlation .784** .716* .616* .437
Sig (2 tailed) .000 .020 .010 .000 1
**. Correlation is significant at the 0.01 level (2-tailed).
*. Correlation is significant at the 0.05 level (2-tailed).
4.8 Regression Analysis
Since there existed a strong positive relationship between entrepreneurship training,
access to finance, business development services and success of youth business start-ups,
a regression analysis was conducted to determine the level of significance for the
relationships. The findings in table 4.23 indicates an adjusted R squared of 0.728, which
means that 73% of success in youth business start-ups was attributable to
entrepreneurship training, access to finance, business development services. The
remaining 27% is attributable to other factors that were not considered in this study.
Table 4.24 shows the ANOVA for the study where F (3, 147) = 4.202; p ≤ 0.05; Which
means, all variables were statistically significant
Table 4.25 indicates coefficients for multiple regression; Entrepreneurship training
(0.418); p ≤ 0.05, Access to finance (594); p ≤ 0.05; and business development services
(423); p ≤ 0.05. All variables were statistically significant.
52
Table 4.23: Multiple Regression factors
Model R R Square Adjusted R Square
Std. Error of the
Estimate
1 .736a .730 .728 .002
a. Predictors: (Constant), Entrepreneurship Education, Access to finance, Business Development
Services
Table 4.24: ANOVA
Model Sum of Squares df Mean Square F Sig.
1 Regression 3.072 3 1.322 4.202 .000b
Residual 146.128 147 .023
Total 147.29 150
a. Dependent Variable: Success of Youth Business Start-ups
b. Predictors: (Constant), Entrepreneurship Education, Access to finance, Business Development
Services
Table 4.25: Multiple Regression Coefficients
Model
Unstandardized Coefficients
Standardized
Coefficients
t Sig. B Std. Error Beta
(Constant) 1.222 .082 1.420 .000
Entrepreneurship
Education .460 .042 .418 1.412 .000
Access to finance .624 .030 .594 .425 .010
Business
Development
Services
.438 .015 .423 .324 .000
a. Dependent Variable: Success of Youth Business Start-ups
The formula used to determine the individual factor contribution to perceived value was;
Success of Youth Business Start-ups = 1.222+ 0.460 Entrepreneurship Education + 0. 624
Access to finance + 0.438 Business Development Services
The regression model adopted was:
Y= β0 + β1X1+ β2X2 + β3X3 + e
Where Y = Success of Youth Business Start-ups
X1 = Entrepreneurship Education
X2 = Access to finance
53
X3 = Business Development Services
4.9 Chapter Summary
The major findings of this have revealed that to a large extent, bigger percentage of
factors contribute to the success of youth business start-up was attributable to
entrepreneurship training, access to finance, and business development services. The
smaller percentage of factors that contribute to the success of youth business start-ups is
attributable to other factors not considered in this study. These study findings have
indicated that access to have the strongest positive relationship with success of youth
business start-ups, followed by a strong positive relationship between business
development services and success of youth business start-ups, and finally, the relationship
between entrepreneurship training and success of youth business start-ups. All the
relationships were statistically significant. Chapter five presents the study discussion,
conclusion, and recommendations.
54
CHAPTER FIVE
5.0 DISCUSSION, CONCLUSSION AND RECOMMENDATIONS
5.1 Introduction
This chapter presents the study discussion, conclusion, and recommendations based on
the specific objectives of the study. Discussion on influence of entrepreneurship training
is presented first, followed by discussion on how access to finance influences youth
business start-ups, and finally, how business development services influences youth
business start-ups. The study conclusion and recommendations are also presented in that
order.
5.2 Summary
The general objective of this study was to determine the factors that influence success of
youth business startups. Specific objective for the study were; the extent to
entrepreneurship training influence the success of youth business start-ups; How access to
finance influence the success of youth business start-ups, and how business development
services enhance success of youth business start-ups.
This study adopted a descriptive survey research design. The population of the study was
composed of 410 youth under TechnoServe’s Stryde entrepreneurship training program in
phase two, cohort one youth beneficiaries in Nyeri County. Stratified sampling technique
was adopted to select a sample size of 196. The study primary data was collected using
closed ended structured questionnaires. Data was analyzed for descriptive statistics and
inferential statistics using Statistical Package for Social Sciences (SPSS). Findings were
presented using tables and figures.
The findings on the influence of entrepreneurship training on success of youth business
start-ups revealed the existence of a positive relationship between entrepreneurship
training and success of youth entrepreneurship. The relationship was statistically
significant.
55
The findings on how access to finance influence on success of youth business start-ups
revealed the existence of a positive relationship between access to finance and success of
youth entrepreneurship. The relationship was statistically significant.
The findings on how business development services influence on success of youth
business start-ups revealed the existence of a positive relationship between business
development services and success of youth entrepreneurship. The relationship was
statistically significant.
5.3 Discussion
5.3.1 Entrepreneurship Training and Success of Youth Business Start-Ups
The findings on the influence of entrepreneurship training on success of youth business
start-ups revealed the existence of a positive relationship between entrepreneurship
training and success of youth entrepreneurship. This finding is in line with a study
conducted by Onugu (2015) in Nigeria on factors contributing to the success of youth
business start-ups revealed that quality of entrepreneurship training offered by NGOs, the
government, and development partner agencies strongly contributed to success of youth
business start-ups. The factors explored by the study included quality of youth
entrepreneurship training, the training program, and experience of the trainers, which
were all significant.
This study indeed confirms that entrepreneurship education is important in enhancing the
success of youth business start-ups. To this end, a similar study that had been conducted
by Murimi (2015) had revealed that 63% of respondents believed that entrepreneurship
education had contributed to the success of youth business start-ups. Similarly, a study by
Kimando (2012) on factors that influence the success of youth business start-ups under
Youth Entrepreneurship Development fund had indicated that 76% of the study
respondents believed that entrepreneurship training was essential to the success of youth
business start-ups in Muranga County. Equally, 99% of the same study had also indicated
that entrepreneurship training had greatly improved the success of youth business start-
ups under the YEDF in Muranga. This shows how indispensable entrepreneurship
training is in enhancing success of youth business start-ups.
56
Entrepreneurship training is important because it is a leaning activity, which is directed
towards acquisition of specific knowledge and skills for the purpose of an occupation. It
focuses on the job task. The training can be both formal and informal and is usually
carried out to assist a person understand and perform his/her job better. Armstrong (1999)
equally had argued that training was effective in youth business start-ups since it helped
not only to equip and empower the youth, but also to modify their behaviour through
learning. As youth are able to compete effectively in the increasingly globalized world.
Brian and Cant (2010) study in South Africa among youth start-ups to determine the
impact of record keeping training and success of the business enterprises revealed the
existence of a positive relationship between record keeping and success of youth business
start-ups in South Africa. The study further indicated that finance record keeping,
inventory record keeping, stock record keeping were all statistically significant. This is in
line with the findings of this study that has revealed that majority (82%) of respondents
believed that record keeping was essential and had helped their business start-ups to
succeed
This study has also revealed financial training is important for the success of youth
business start-ups. Similar sentiments had been expressed by Al-Mamun et al., (2010) in
study they had conducted in Malaysia among youth entrepreneurs who were engage in
business startups had noted the existence of relationship between financial training and
success of youth business start-ups. The study looked at procurement, cash flow
management, and sales. This means that youth who receive financial training before
venturing into entrepreneurship have a higher chance of succeeding, compared to those
who don’t.
5.3.2 Access to Finance and Success of Youth Business Start-Ups
The findings on how access to finance influence on success of youth business start-ups
revealed the existence of a positive relationship between access to finance and success of
youth entrepreneurship. This finding is in line with Al-Mamun et al., (2010) who argued
that access to finance had a significant relationship with the success of youth business
start-ups. His study on youth start –ups in Malaysia revealed a strong relationship
between access to finance, and success of youth entrepreneurship start-ups, meaning the
relationship was significant. They concluded that mechanisms for access to finance by the
57
youth venturing in business start-ups should be easily accessible, not only as a
motivational factor of venturing in business start-up, but also as a mechanism of ensuring
that the start-up will be successful.
Renko et al., (2012) had argued that most youth start-ups usually face distinctive
challenges particularly in trying to access business capital, or operational finances.
Wanjohi and Mugure (2008) equally argued that most youth start-ups in Kenya lacked
sufficient access to finance for entrepreneurship due to stringent conditions that made it
difficult for the youth to access funds they needed to finance their start-ups. As a result,
most venture started by the youth do fold up as soon as they start since they lack the
financial capability to sustain the rigor of a start-up.
Equally, access to finances through business loans has become more stringent, locking
out most youth who are in need of credit for entrepreneurial start-ups. Most youth in
Africa do not own land, or other factors of production, and usually do not have access to
collateral for accessing loans, thus making access to financing difficult (Brian, 2011).
Most banks and financial institutions regard youth business start-ups as high rick
ventures, and therefore, decline to invest in this ventures stringent loan access conditions
are a major deterrent to youth who desire to venture into entrepreneurship.
The findings of this study suggest that majority (82%) of the study respondents believed
that stringent loan conditions and cumbersome procedures were the main deterrent for
youth in accessing start up finance. As a result, majority (89%) also felt that lack of
access to finance hinders the success of youth start-ups. To this, Naidu and Chand (2012)
had argued that the inability for youth entrepreneurs to access external and internal
financing from banks and other financial institutions contributes to the high failure rates
of business start-ups. These assertions are in line with the findings of this study to
enhance the success of youth business start-ups, it is essential that conditions for loans
should be within reach and affordability of youth entrepreneurs. These assertions were
collaborated by Ostry et al., (2014) study in Sub Saharan Africa that revealed that more
than 70% of youth start-ups fail in the first year due to poor financing mechanism or lack
of financing all together from the financial institutions.
Kinyanjui (2010) had also noted the existence of a strong relationship between high
interest rates and success of youth business start-ups. In a study he conducted in Kenya
58
among the youth entrepreneurs, his findings indicated that 70% of youth startups that had
tried to access funding when the interest rates were above 18%, did not succeed. As such,
he concluded that the issue of high interest rates charged loans for youth entrepreneurs
had made it difficult youth entrepreneurs to access financing, as and as a result, more than
60% of youth start-ups in Kenya fail within six month of inception. Therefore, it is safer
to argue that there exists a relationship between interest rated and success of youth
business startups as has been demonstrated by the findings of this study.
5.3.3 Business Development Services and Success of Youth Business Start-Ups
The findings on how business development services influence on success of youth
business start-ups revealed the existence of a positive relationship between business
development services and success of youth entrepreneurship. These findings are in line
with ILO (2010) findings that revealed the existence of a relationship between BDS the
success of youth business start-ups for OECD countries. The study further revealed that
marketing services and sales services ranked the most significant for the success of youth
start-ups. The argument was based on the fact that BDS services did help youth
entrepreneurs target their services to the right clients, and right market, thus enhancing
the chance of turning profitable.
ILO (2010) findings also had revealed that youth start-ups in in Mozambique that had
access to BDS services had a significant increased revenue and profitability by 60%
compared to those start-ups that did not. This helps illustrate how significant BDS are to
the success of youth business start-ups. However, Hamadi (2010) on the other hand had
argued that BDS services are only as helpful to the success of youth entrepreneurs,
depending on the dedication, commitment and knowledge of youth on the ventures they
are engaging in. Further, he argued that when youth entrepreneurs engage in start-ups
they have not modeled well, or conducted market survey to assured of market need, no
amount of BDS can save the enterprise. This assertions, however true, were not examined
by this study. Therefore, the merit of Hamadi’s argument could not be affirmed on
contested on the same.
This study has also revealed that marketing services are important component towards the
success of youth entrepreneurship start-ups. Majority (88%) of respondents for this study
believed that marketing services were important, and also believed that marketing
59
services should be part entrepreneurship training program for the youth business start-ups.
According to Njoroge and Gathungu (2013) marketing in entrepreneurship involves
segmentation, targeting and positioning of business products and services to an
appropriate buyer. It is important that youth entrepreneurs identify and understand
specific group of customers that are critical to the success of youth business start-ups
Marketing support services are important because they help youth entrepreneurs to be
able to not only segment customers critical to the success of their business start-up, but
also, but also collect feedback from this set of customers to further enhance product and
service development. To this, Rahmati (2010) had argued that youth entrepreneurship
start-ups need marketing support survives either from governmental departments, non-
governmental institutions, and donor agencies to enable them nature their concepts into
successful start-up entities.
This study has also revealed that Non-governmental organizations are essential in
connecting your entrepreneurs to marketing training. Equally, NGOs are helping provide
the youth business start-ups with expertise that enhance the attractiveness of their
business products and services. This study has also indicated that Information
Communication and Technology (ICT) services are essential component for enhancing
the success of youth business start-ups. Majority, (86%) of respondents indicated that ICT
was essential for the success of their business start-ups. This confirms a study conducted
by Okten and Okonkwo (2011) in Indonesia that had revealed the existence of a
relationship between ICT and success of youth entrepreneurship start-ups. On the other
hand, Osterwalder and Pigneur (2010) had indicated that sales and promotion services
were important in that they helped youth entrepreneurs develop cohesive and well-
constructed elevator pitches that ultimate, enables youth to sell their products and
services, leading to success of business start-ups.
5.4 Conclusion
5.4.1 Entrepreneurship Training and Success of Youth Business Start-Ups
This study has revealed the existence of a positive relationship between entrepreneurship
training and success of youth business start-ups. Entrepreneurship training consisted of
entrepreneurship education, finance training, and record keeping training. All these
60
components significantly contributed to the positive relationship. Therefore, this study
concludes that the relationship between entrepreneurship training and success of youth
business start-ups was statistically significant.
5.4.2 Access to Finance and Success of Youth Business Start-Ups
This study has revealed the existence of a positive relationship between access to finance
and success of youth business start-ups. Access to finance consisted stringent loan
conditions, lack of business management skills, and high interest rates. All these
components significantly contributed to the positive relationship. Therefore, this study
concludes that the relationship between access to finance and success of youth business
start-ups was statistically significant.
5.4.3 Business Development Services and Success of Youth Business Start-Ups
This study has revealed the existence of a positive relationship between business
development services and success of youth business start-ups. Business development
services consisted marketing services, information technology, and sales and promotion.
All these components significantly contributed to the positive relationship. Therefore, this
study concludes that the relationship between business development services and success
of youth business start-ups was statistically significant.
5.5 Recommendation
Recommendations that are provided in this section are based on the study research
questions.
5.5.1 Recommendation for Improvement
5.5.1.1 Entrepreneurship Training and Success of Youth Business Start-Ups
Since the findings of this study revealed a significant relationship between
entrepreneurship training and youth business start-ups, management at TechnoServe
should put mechanisms in place to ensure this relationship is not only enhanced, but also
sustainable. Of significant importance is overall entrepreneurship education. Youth
should be segmented in groups that reflects different types of training needed. For
instance, those who have gone through TechnoServe finance and record keeping training
61
might need refresher training from time to time. However, it is highly recommended that
those who haven’t gone through the training should do so. Equally, since
entrepreneurship training is very important as revealed by this study TechnoServe should
expand training modules beyond finance and record keeping to marketing, sales, elevator
pitches, and sustainable growth for business start-ups.
5.5.1.2 Access to Finance and Success of Youth Business Start-Ups
The findings of this study revealed the existence of a strong relationship between access
to finance and success of youth business start-ups. It is recommended that management at
TechnoServe should work with policy makers and a macroeconomic level to influence
how loan policies are developed particularly those targeting the youth. This collaboration
should also target financial institutions who have stringent loan conditions for youth start-
ups. This will go a long way in ensuring the conditions are lightened for the youth.
Equally, TechnoServe should lobby government to ensure that interest on youth loans is
minimal and affordable. Youth having increased opportunities to enhance loans will lead
to enhanced success of business start-ups.
5.5.1.3 Business Development Services and Success of Youth Business Start-Ups
Since the findings of this study revealed the existence of a strong relationship between
business development services and success of youth entrepreneurship, it is recommended
that management at TechnoServe should develop mechanisms to ensure that business
development services such as access to marketing services, access to information
technology services, and access to channels of sales and promotion are available to the
youth. These services should not be occasional provisions, but rather, they should be
accessible all year round. This can be accomplished through collaborations and
partnership with the government, donor agencies and other NGOs offering this services.
5.5.2 Recommendation for Future Research
This study focused on factors influencing success of youth entrepreneurship in business
start-ups. To this end, entrepreneurship education which consisted of finance and record
keeping trainings were explored. Equally, on access to finance, effects of stringent loans
conditions, and high interest rates. On business development services, marketing services,
ICT, and sales and promotion services were considered. However, this factors are not
62
exhaustive in terms what constitutes success of youth business start-ups. Researchers and
academicians desiring to further studies on success of youth business start-ups, should
explore other factors not considered in this study.
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APPENDICES
APPENDIX I: COVER LETTER
Carolyne Maina
P.O Box 58623 – 00200
Nairobi
Dear Respondent,
RE: REQUEST FOR YOUR PARTICIPATION IN MY RESEARCH PROPOSAL
My name is Carolyne Maina, currently pursuing a course towards conferment of Masters
of Business Administration (MBA) from United States International University – Africa.
In partial fulfilment of degree requirements, I am required to conduct a research in the
area of my work. My research topic is: “Factors Influencing the Success of Youth
Entrepreneurship Business Start-ups; A Case Study of TechnoServe Stryde Youth
Entrepreneurship Program in Nyeri”. Your participation in this study is voluntary. I will
highly appreciate if you would spare few minutes to fill in all sections of the
questionnaire to enable me complete the study.
The findings of this study will be shared by TechnoServe management for the betterment
of management policies and frameworks on Knowledge Management
Your participation in this study will be highly appreciated.
Yours Sincerely,
Carolyne Maina
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APPENDIX I1: RESEARCH QUESTIONNAIRE
SECTION I – DEMOGRAPHIC INFORMATION
Kindly answer the questions provided by TICKING () in the box that represents your
answer.
1. Gender: Male Female
2. Kindly indicate your age:
18-21 years 23-26 years 27-30 years 31-35 years
3. What is your level of education?
Primary Secondary College University
4. What is your marital status?
Single Married Divorced
5. Area of entrepreneurship:
ICT Agriculture Sales & Marketing Retail Shop
SECTION II: – Influence of Entrepreneurship Training on Success of Youth Start-
ups
Kindly tick () the answer that best represents your views
(Strongly Disagree = 1; Disagree = 2; Neutral = 3; Agree = 4; Strongly Agree = 5)
Entrepreneurship Education 1 2 3 4 5
You have received education under TechnoServe Stryde Program
Entrepreneurship Education has contributed to success of your
business
Was the training objective met
Was the trainer knowledgeable enough
Was the training content sufficient to make you succeed as an
entrepreneur
Would you recommend this training to other youth start ups
Record Keeping Training
You have been trained on Record Keeping
Recording Keeping is essential for success of Youth start-ups
Record Keeping has helped your start-up to succeed
Finance Management Training
You have received finance management training
Finance management training is essential for success of your
business start-up
Finance management training has made your start-up to succeed
SECTION III – How Access to Finance Affects Success of Youth Start-Ups
70
6. Where did you get initial capital to start your business?
Personal Savings Bank Loan Family Youth Fund Other(Specify)______
7. What are some of the hindrance in access to finance?
Lack of Collateral Lack of business plan Low amount of loan Cumbersome
procedures
Kindly tick () the answer that best represents your views
(Strongly Disagree = 1…, Strongly Agree = 5)
Stringent Loan Conditions 1 2 3 4 5
Access to loans has stringent conditions for youth start-ups
Stringent loan conditions hinder the success of youth business
start-ups
Stringent loan conditions should be abolished to allow youth
entrepreneurs access business finance
Training has enhanced your business experience
Lack of business experience hinders your access to business
finances
Lack of business experience should not hinder youth access to
business finance.
Currently, interest rates for loans on youth start-ups is high
High interest rates hinder the success of youth start-ups
SECTION IV –How Business Development Services Enhance Success of Youth
Start-ups
8. What kind of institutions/organization provided you with business Development
services?
Government NGOs Business club Chamber of commerce Bank Other ______
9. Indicate the kinds of challenges you face in marketing your products
Stiff competition Poor Location Low Demand High Marketing Costs
Kindly tick () the answer that best represents your views
(Strongly Disagree = 1…, Strongly Agree = 5)
Marketing Support Services 1 2 3 4 5
You have marketing services for your goods services
Marketing support services if important to the success of youth
start-ups
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Marketing support services should be incorporated in
entrepreneurship training
You have business connections that helps you market your products
You have received training and support on how to use ICT services
ICT services has enabled your products and services to reach your
clients quickly
ICT services are essential for success of your business start-up
Sales and Promotion Services
You have received sales and promotion support through
TechnoServe
Sales and Promotion has made it possible for your products and
services to be known by clients
Sales and promotion is essential for success of your business
SECTION IV –Success of Youth Business Start –Ups
Kindly tick () the answer that best represents your views
(Strongly Disagree = 1…, Strongly Agree = 5)
Success of Youth Business Start-Ups 1 2 3 4 5
10. Your business is registered
11. You keep adequate business records
12. You have attended entrepreneurship training
13. You find access to loans very difficult due to stringent bank rules
14. You use marketing support services for your business
15. You use sales and promotion services to enhance sales for your
business
The End, Thank you for your participation.
