Beyond technical skills training: the impact of credit counselling on entrepreneurial behavior of ugandan youth

Juliet Ssekandi, Zeridah Zigiti, Daniel Joloba, Benjamin Kachero and Samuel Galiwango

Working Papers PIERI from PEP-PIERI

Abstract: There is a low financial credit take among youth in Uganda because potential beneficiaries perceive the associated risk as high. This study assesses the determinants of entrepreneurial risk tolerance among Ugandan youth using experimental data from a randomised control trial and a real-life investment risk experiment. The intervention consists of credit-counselling and sector-specific business training for young men and women aged 18-35 years who own a business to inform them about the obligations and commitments associated with financial credit. The intervention has a significant impact on the demand for credit and related intermediate outcomes such as the ownership of a bank account and the investment in assets. The study finds that the youth actually exhibit lower demand for credit after the business training. This is attributed to an increased awareness of the actual risk associated with taking out credit. The findings of this research reinforce national strategies to promote soft skills for business entrepreneurship, extending beyond the standard business training.

Keywords: Credit counseling; Youth Venture Capital Fund; Risk Experiment; Uganda; Youth Employment; Randomised experiment; Risk Tolerance (search for similar items in EconPapers)
JEL-codes: M13 O16 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-ent and nep-ino
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Persistent link: https://EconPapers.repec.org/RePEc:lvl:piercr:2016-22

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