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DETERMINANTS OF LOAN REPAYMENT AMONG AGRI-BUSSINESS SMES RECIPIENTS OF THE YOUTH ENTERPRISE REVOLVING FUNDS IN ESWATINI
The Government of Eswatini (GoE) established the Youth Enterprise Revolving Fund (YERF) to reduce on the youth unemployment in the country estimated at 47.4%. Although the fund attracted many youth entrepreneurs, about 69% beneficiaries have failed to repay back their loans and the majority (82%) of defaulting Small-Medium Enterprises (SMEs) are agribusiness related. Factors responsible for this poor repayment of funds back into the state Youth Enterprise Revolving Fund scheme are scantly known given the limited literature accessed by the authors of this article, hence the study. The study sampled 62 recipients out of the 72 agri-business SMEs holder financed by the YERF institution across the country. Primary data were obtained from the 62 recipients, through face to face interviews. To achieve the objectives of this study, descriptive analysis and binary logistic regression model were employed to describe the characteristics of the sampled recipients and determinants of YERF loan repayments, respectively. The findings of this study briefly characterise YERF beneficiaries as majority being males aged averagely 31 years, attained high school education(66%), not married (61%), business skilled (69%), and mostly engage in broiler chicken and piggery enterprises. The findings generated by the binary logit model indicate that gender and off-farm incomes were the determinants of loan repayment. It can be concluded that males earning more off-farm incomes have a relatively higher probability of repaying the YERF loans compared to their female counterparts. There were three major constraints faced by youth agribusiness SMEs loan repayments processes and this included COVID-19 Pandemic, political unrest and fluctuating agricultural market prices. The study recommends additional support should be availed to female youth owned SMEs, and also be provided equal opportunities to access off-farm prospects that will enable them payback the needed YERF to the government. Additionally, business affected by the COVID-19 pandemic, political unrest and rising inflation on agro-inputs shocks should be given recovery funds and input-subsidies to normalise production enough enabling loan repayments.
Keywords: Eswatini, Loan repayment, Agri-business SMEs, Youth Enterprise Revolving Fund.