Determinants Of Access To Financing Services By Urban Youth: The Case Of Holeta Town, Welmera District, Oromia Special Zone Surrounding Finfinne, Oromia Regional State, Ethiopia

Abstract

Currently youth comprises a significant proportion of the population. Only limited jobs opportunities have been created by this sizeable population groups. One of the factors that limit job creation opportunity is limited access to formal financial services and poor financial inclusion structure of the country. As a result of this unemployment is rapidly increasing particularly in urban setting for youth due to weak self-employment opportunity creation which can help youth to earn their livings and contribute to the economic development of their country. Financial services for the poor in general and youth in particular is a powerful weapon to reduce or alleviate poverty. Access to financial system can empower individuals both economically and socially, allowing them to integrate more successfully into the economy of their countries, actively contribute to their development and protect themselves against economic shocks. Despite this fact, urban youth are the most underserved segment of the population from the financial system of the country. The minimal access to credit by youth to create their own new business or expanding existing aggravated the problem. This has its own negative impact on the healthy transition of youth to adult. Therefore one of the causes of human poverty is lack of equal opportunity to basic services at the right time and place such as access to credit for youth. In line with this, the research has explored determinants of access to financing services by urban youth to practice business and contribute to their country’s economic development process. To address the aforementioned objectives the study used both qualitative and quantitative data types which were collected using key informants interview guideline and survey questionnaire. Similarly descriptive statistical tools used to analyze the data. The key findings of the research indicated that lack of asset for collateral, complex application procedure, limitation of business skill, financial literacy, high loan fee and lack of demand limit youth access to financial services in general and credit in particular