Influence of Financial Innovationon Sustainability of Youth-Owned Enterprisesin Western Region, Kenya

Abstract

Purpose: This study explores the influence of financial innovation on the sustainability of youth-owned enterprises in the Western region of Kenya.

Design/Methodology/Approach: Based on innovation diffusion theory and adopting a pragmatic approach, the current study used a descriptive survey design. The target population was the chairpersons/owners of 443 registered youth group enterprises in Kakamega, Vihiga, Busia, and Bungoma counties; the required sample size was calculated using Taro Yamane’s proportional sampling formula to give 210 respondents. Structured and semi-structured questionnaires were used to gather information about the participants, and the data was analysed by both descriptive and inferential statistics with the help of SPSS 23.

Findings: Results obtained from a linear regression analysis showed that financial innovation has a significant and positive linear relationship with the sustainability of the youth-owned enterprises (Beta = 0.660**, p≤0.01). The model accounts for 43.4% of the variability of financial sustainability suggested by the findings, with the remaining 56.6% caused by other influences.

Implications/Originality/Value: The study highlights the significance of financial innovation for the sustenance of youth businesses. Proprietors of youth-owned enterprises need to interact with dynamic, innovative financial solutions for improvement of sustainability.