The Effects Of Micro Finance On Youth Empowerment: A Case Study Of The Namibia Youth Credit Scheme In Otjiwarongo

ABSTRACT

The purpose of this study was to analyze the effects of Microfinance on youth empowerment. The researcher targeted 72 beneficiaries of the Namibian Youth Credit Scheme in Otjiwarongo. A descriptive research design was adopted and purposive and systematic sampling methods to select 72 respondents of which 55 participated in the survey. Descriptive and Chi- square test statistics were used to analyze the data. The findings of the study seem to suggest that NYCS is an effective tool to alleviate poverty, unemployment among youth and financially empower them. The Chi-square test revealed that the income of the youth had changed after joining the NYSC program. Similarly, NYCS had promoted the SMEs ventures projects started by Youth in Otjiwarongo Municipality (see the chi-square test statistics on Tables 4.2- 4.3). Considering the view that the unemployment rate is high among youth, the study concluded that microfinance programs at this stage have improved the living standard of the youth and that of their families. It has reduced poverty among the youth, gave the youth an opportunity to start and expand their businesses thereby creating employment. However, the study recommended that, to assess and quantify the effectiveness and the impact of the program extensively, the Government of the Republic of Namibia should intervene to curb the higher interest rate charged by MFIs, and that NAMFISA should develop a friendly policy in favor of micro entrepreneurs. Moreover, the majority of respondents have found the 20% interest to be very high and killing their business at infant stage. It further recommended that training is crucial for both borrowers and MFI (NYCS) personnel to enable them to improve on their service delivery and financial utilization to increase accessibility of microfinance products and services. The government (MSYNS) and stakeholders (SSC) should be involved in all key decisions affecting micro financing. This would help to bring new ideas that MFI (NYCS) is able to take and implement to minimize all the obstacles experienced currently. To comply effectively with the role of empowering the youth economically, MFI (NYCS) needs to mobilize the youth, train them in all elements that involves micro financing to sustain the economic welfare of the youth. It urges future research to examine the impact of microfinance on recipients over time, since some studies suggest that it takes time for microfinance to have an effect on the livelihoods of the poor and youth.