Analysis of factors influencing access to credit by youth and women entrepreneurs in Nambale sub-County, Iganga district in Uganda

Abstract

The objective of this study was to analyze factors affecting access to credit finance by youth and women entrepreneurs in Nambale sub-county, a case study of Iganga district and the study was guided by the objectives; examining what extent collateral security influences access to credit by x small scale Youth and women entrepreneurs, assessing how interest rate charged influences access to credit by youths entrepreneurs and determining the level at which application procedures for credit influences access to Loans by youth and women entrepreneurs. The target population for this study included 250 youth and women small scale businesses in the 4 parishes and 35 villages of Nambale sub-county Iganga district where the researcher using Krejcie and Morgan (1970) estimated a sample size covered 100 respondents from Small scale businesses owned by youth and women operating in Nambaale sub county, Iganga District whose business included operating shops, Mobile money, Groceries, buying and selling milk, potatoes, operating salon, restaurants, bodaboda among others. The study which recorded a response rate of 72% was stipulated the following findings; demographic, the study indicated that most of the female were involved in investment activities which are financed through loans, majority of youths between 18-31 years were seeking credit to start small scale businesses as a source of employment, majority of the respondents had acquired satisfactory education to be able to comprehend and fill the questionnaires appropriately. The study furthermore indicated that majority of small-scale youth and women entrepreneurs in Nambale sub-county, Iganga district did not have any form of collateral and this is one of the factors they cannot access credit finance from lending institution, majority of respondents strongly disagreed about acceptance of collateral by lending institutions, the majority are in agreement that collateral is required by all lending institutions near them. The study also found out that the cost of borrowing was high and lending application procedures were not friendly to customers. It was noticed that loan application process was time consuming hence many women and youth gave up on accessing loans. The study recommends that financial institutions should establish lending procedures that will attract youth and women entrepreneurs and accommodate them in access to credit