European Journal of Social Sciences, Arts and Humanities Vol. 2, No. 2, 2014 Page 1 Progressive Academic Publishing, UK www.journalsgate.com ROLE OF YOUTH ENTERPRISE DEVELOPMENT FUND IN CURBING YOUTH UNEMPLOYMENT IN KENYA Tabitha Mumbi Gachugia Milcah Mulu-Mutuku Dolphine Odero-Wanga Egerton University Egerton University Egerton University KENYA KENYA KENYA tgachugia@gmail.com mwmilcah@gmail.com wangadake@yahoo.com CITATION: Gachugia, T.M., Mulu-Mutuku, M. & Odero-Wanga, D. (2014). Role of youth enterprise development fund in curbing youth unemployment in Kenya. European Journal of Social Sciences, Arts and Humanities, 2 (2), 1-11. ABSTRACT Unemployment is increasingly being recognized as one of the serious problems affecting the youth in Kenya. In response to these challenge the government introduced the Youth Enterprise Development Fund (YEDF), with an aim of supporting youth owned enterprises as well as enabling youth to start their own enterprises thus creating employment. Despite the introduction of YEDF, youth in Naivasha District are still faced by high unemployment rate. The purpose of this study was to establish the role of YEDF in curbing youth unemployment in the larger Naivasha District. The ex post facto research design was used. The study population was 1172 youth from the 51 funded groups. A sample of 182 youth was selected through stratification and proportionate simple random sampling procedures. Data was collected using an interview guide and analyzed through descriptive percentages frequencies and chi-square. The result indicated that YEDF had enabled youth to develop (start and/or expand) their micro and small enterprises which have employed a number of youth. The chi-square test (χ 2 (1, n=27) = 0.142, ρ= 0.03) indicates that there was a significant increase in the number of youth employed in youth enterprises as a result of YEDF funding. Further analysis of the findings indicated that group owned enterprises had employed more youth compared to the individually owned enterprises. To increase the employment opportunities for the youth the study suggest there is a need to improve the performance of the YEDF SMEs, launch a campaign to educate Kenyan youth about the fund, intensify youth involvement, train youth on how to start and manage business including finance literacy. Keywords: Youth Enterprise Development Fund, Youth Employment, and Youth. INTRODUCTION The Youth Enterprise Development Fund (YEDF) was established by the government of Kenya in 2006 to provide an on lending facility to the youth, with low interest rate and flexible collaterals, with an aim of supporting youth-owned enterprises and to enable other youths to start micro and small enterprises (Ministry of Youth Affairs and Sports 2009). This was expected to create employment, which was in line with, the government economic recovery strategy (ERS) for wealth and employment creation (2003-2007), which estimated that, about 500,000 jobs needed to be created annually, of which 88 percent were to have come from the MSE sector.