The Effect of Business Environment on Investment among Financially Included Youth in Kenya

Abstract

The importance of financial inclusion in reducing poverty and achieving inclusive growth through household investments cannot be gainsaid. This has seen countries spend huge amount of resources towards financial inclusion. Due to these efforts, Kenya has achieved high levels of financial inclusion. Unfortunately, the poverty levels are still high and unemployment has been increasing. The purpose of this study was to find out the effect of business environment on investment among financially included youth in Kenya. The study population was Kenyan youth from Kirinyaga and Nyeri Counties. The study used a descriptive survey research design where sample size was 463 respondents. A questionnaire was used to collect the data. A test of the full model against constant only model was statistically significant, indicating that predictors as a set reliably distinguished between investors and non-investors (chi square =23.945, p =.000 with df =4). The Wald criterion demonstrated that Government Services, and Governance and Security were negatively related to investment and statistically significant, but Business Registration and Tax Procedure though negatively related to investment were not statistically significant. The government should put mechanisms in place that will improve business environment of the youth. With the implementation of the recommendations, youth will be able to undertake advantage of financial inclusion.