INFLUENCE OF FINANCIAL RISK ON PERFORMANCE OF YOUTH OWNED ENTERPRISES IN BARINGO NORTH SUB COUNTY, KENYA

Small and Medium Enterprises (SMEs) owned by youths play vital role in Kenya’s economy. Despite this key role, they are often faced with entrepreneurial risks. Studies have been conducted to investigate these risks but few have attempted to focus on youth owned SMEs. The effects of financial risk are unknown. Therefore, the purpose of this study is to investigate the influence of financial risk on performance of youth owned small and medium enterprises in Baringo North Sub County, Kenya. The research questions are; what is the influence of financial risk on performance of youth owned enterprises in Baringo North Sub County. The study was anchored on Enterprises Risk Management theory. A descriptive design was used. The target population was 182 and a sample of 125 respondents was used. Simple random sampling technique was used to select respondents and data collection was done using questionnaires. Multiple regression technique was used to analyze data with help of SPSS. From regression model, the result showed that 82.4% of the variation in performance of youth owned enterprise was due to entrepreneurial risk (R2=0.824) while 28.8% was for other factors. The findings revealed positive significant influence of financial risk and market risk on performance of youth owned enterprise (t=3.312, P<0.05; t=5.600, P<0.05) while social risk and psychological risk (t= -0.492, P>0.05; t=-0.018, P>0.05) had insignificant influence on the performance of youth owned enterprise. The study concluded that financial risk greatly affects performance of youth owned SMEs but effects of social risk and psychological risk were minimal. The study recommended that MFIs to increase their support to youth owned enterprises, use of modern marketing strategies and improvement on networking, make observations on social-cultural dynamics and respond accordingly and finally more trainings be organized by the County Government. The study will benefit youth entrepreneurs’ in Baringo North Sub County, Baringo County Government, National Government and Scholars.  Article visualizations