Loan repayment under youth livelihood programme in Iganga District, Uganda

Abstract

Several poverty alleviations have been implemented in Uganda. But only one has targeted the youths. The Youth Livelihood Programme designed to assist the youth in overcome unemployment is implemented across the country as a revolving fund and many youths have taken loans to improve their welfare. This study investigated factors influencing loan repayment in the Youth Livelihood Programme in the two divisions of Iganga Municipality that is Central and Northern divisions. The study examined the appropriateness of the selection criteria for advancing loans to the youths in Iganga Municipality, evaluated the effectiveness of the of the recovery procedure on loan repayment, and assessed the extent to which group dynamics contribute to loan repayment. The study was both qualitative and quantitative in nature and data was collected form 106 youth and 9 key informants. The findings of the study revealed that although many youths have embraced the programme, there is a high defaulting rate from the beneficiaries in Iganga Municipality. The study established that the major contributing factors are; low levels of adherence to the funding process, low levels of monitoring, large youth groups, low levels of education and time taken between application and receiving of the loan among others were among the reasons for high defaulting rates. but to a large extent not benefited fully from it. In reference to the joint liability theory, the study recommends that to improve on the repayment of the funds borrowed, it is important to improve and streamline on the selection process, sensitize the youth on how to use the loan, reduce on the number of group members and conduct prompter skills training of the youth before giving them the loan.