FINANCIAL INSTITUTIONS AND YOUTH EMPLOYMENT IN GICUMBI DISTRICT, RWANDA
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Date
2025-07-28
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Abstract
The purpose of this study was to examine the role of financial institutions in promoting youth
employment in Gicumbi District, Rwanda. The specific objectives were: to assess the effect of
credit accessibility on youth entrepreneurial activities in Gicumbi District; to evaluate the
influence of financial literacy programs offered by financial institutions on youth employment
sustainability; and to analyze the relationship between collateral requirements and youth
participation in loan schemes. The study adopted a descriptive research design and employed both
quantitative and qualitative approaches. A sample size of 83 respondents was selected using
purposive and random sampling techniques. The findings revealed that high interest rates
significantly reduce the profitability of youth-led enterprises, limiting their ability to reinvest and
create employment. Additionally, the study found that fluctuations in the Central Bank Rate (CBR)
indirectly affect youth employment by influencing commercial lending rates, which impacts asset
financing and business expansion. Short-term loans with high interest rates were found to
undermine return on investment and restrict employment growth, while long-term loans with stable
repayment structures were linked to better financial planning and increased hiring potential. Based
on the findings, the study recommended that financial institutions and government agencies should
promote access to affordable credit for youth, strengthen financial literacy programs, and
encourage long-term financing solutions. Furthermore, regulatory bodies should stabilize the
lending environment, and local authorities should establish a Youth Enterprise Development Fund
to support entrepreneurial growth and employment creation among youth in Gicumbi District.