FINANCIAL INCLUSION, ENTERPRISE CHARACTERISTICS AND SUSTAINABILITY OF THE YOUTH OWNED ENTERPRISES IN WESTERN REGION, KENYA.

Abstract

This study explored the influence of financial inclusion and enterprise characteristics on the sustainability of youth-owned enterprises in the western region of Kenya. The specific objectives were to examine the influence of financial intermediation, financial deepening, financial innovation, and crowdfunding on the sustainability of youth-owned enterprises and establish the moderating influence of enterprise characteristics on the relationship between financial inclusion and the sustainability of youth-owned enterprises. The study was guided mainly by financial intermediation theory. It adopted a pragmatism approach and a descriptive survey design. A sample size of 210 respondents was selected using stratified and purposive sampling techniques. Data was collected through structured and semi-structured questionnaires, complemented by secondary financial data. Descriptive analysis was used to summarize data, whereas inferential statistics assessed the nature and the relationships’ strengths using correlation and regression analysis. The study found that: financial intermediation (grand mean=3.5858, β = 0.230 (0.090) at p<0.05); financial deepening (grand mean=3.3943, β = 0.458 (0.116) at p<0.05); financial innovation (grand mean=3.3307, β = 0.471 (0.125) at p<0.05); and crowdfunding (grand mean=3.5715, β = 0.319 (0.156) at p<0.05) had significant influence on the sustainability of youth-owned enterprises and that enterprise characteristics (age, size, ownership structure) significantly moderated the relationship between financial inclusion and sustainability of these enterprises. The study concluded that financial intermediation measures, financial deepening parameters, strategic financial innovations, and timely adoption of crowd funding platforms have a significant influence on the sustainability of youth-owned enterprises and that timely and dynamic application of feasible enterprise characteristics significantly moderates the influence of financial inclusion initiatives on the sustainability of youth-owned enterprises. The study recommends that youth owned enterprises should understand dynamic feasible financial intermediation measures, access information and get financial literacy on financial deepening issues, should be conversant with dynamic and strategic financial innovations that shape financial sustainability of the enterprise, leverage on unique innovation passion, conducting thorough market research, building a strong online presence, engaging with their target audience, and seeking advice from experienced mentors or crowdfunding experts, intertwine flexible size and age characteristics coupled with feasible ownership structures in their organizations so as to harness positive attributes of age and size that can enhance the financial sustainability of the enterprise.