2025-08-132025-08-132025-07-28https://hdl.handle.net/20.500.12311/2920The 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.Thesis