Abebe Negesse Bantu* and N.S Malik
Ethiopian Youth Revolving Fund (YRF) loan was established with objective to provide financial and technical assistance to unemployed youths in alleviating their economic and social difficulties using the sustainably. However, the government and Oromia Credit and Saving Share Company (OCSSCo) reports showed that loan repayment was not performed as expected for the reason not yet been studied. Thus, the purpose of this study was to examine the effect of socio-economic factors on loan repayment performance and sustainability of YRF. The data was collected from 328 respondents from five clusters of Oromia Administrative zones. The descriptive and inferential statistics (chi-square test of association) were used to check the association of independent variables and their effect on dependent. The findings show the existence of peer pressure to use the fund for search for employment than facing hardship in creating job, poor business performance, loan diversion, and wrong choice of business types were affected YRF loan repayment performance at less than 5% level of significance. Finally, the government is recommended to work on creating awareness in public on creating own job, reconsider inclusion of entrepreneurship and business courses in the educational curriculum. OCSSCo should to provide adequate training and guidance to borrowers on fund utilization and management and arrange micro-insurance. Alternatively, the government should redesign the fund utilization by establishing businesses with the fund; employ the youths in it selling shares for each unemployed youth being employed in the business and finally handover the business to the youth after assuring financial viability.
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