INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)

ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025

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Effectiveness of Youth Development Fund in Enhancing Youth

Entrepreneurship in Ilemele Municipality, Tanzania.

Lucy Nicholous, Johnson Mavole*, Ludovick Myumbo*

Department of Sociology, St. Augustine University of Tanzania

*Corresponding Author

DOI:

https://dx.doi.org/10.47772/IJRISS.2025.910000628

Received: 25 October 2025; Accepted: 29 October 2025; Published: 19 November 2025

ABSTRACT

This study comprehensively examines the effectiveness of the Youth Development Fund (YDF) in enhancing

youth entrepreneurship specifically in Ilemela Municipality, located in the Mwanza Region of Tanzania. Guided

by the theoretical framework of Social Capital Theory, the study pursued three specific objectives aimed at

gaining in-depth insights. These objectives include identifying the number of entrepreneurial training sessions

provided to YDF beneficiaries, determining the number of youth-owned enterprises that have been funded by

the YDF, and assessing the sustainability rate of businesses that are supported by the YDF. A descriptive survey

design was employed, utilizing a mixed-methods approach to gather rich qualitative and quantitative data. A

total of 110 respondents, including Youth Development Officers, Community Development Officers, and youth

beneficiaries, were carefully selected through purposive and convenience sampling techniques. Data were

collected using well-structured questionnaires and semi-structured interviews and subsequently analyzed

descriptively to draw meaningful conclusions. The findings revealed that most respondents were aware of the

YDF and that the majority had participated in at least one entrepreneurial training focusing on crucial topics such

as digital investment, group fund management, and business planning. Notably, the YDF was found to contribute

not only to financial empowerment for the youth but also to skill development that is essential for the long-term

sustainability of their enterprises. This study highlights the importance of such initiatives in fostering

entrepreneurship among marginalized groups, thereby promoting economic growth in the region.

Keywords: Youth Development Fund, entrepreneurship, youth empowerment, Ilemela District, Tanzania.

INTRODUCTION

Youth unemployment continues to pose a major challenge to socio-economic development globally. According

to the International Labor Organization (2018), the global youth unemployment rate stands at approximately

13%, nearly three times the adult rate of 4.3%. In Sub-Saharan Africa, an estimated 67% of employed youth live

in poverty despite being economically active, indicating that employment does not necessarily translate to

economic security.

In Tanzania, the Youth Development Fund (YDF) is a key government intervention aimed at addressing youth

unemployment and poverty. It is implemented by Local Government Authorities (LGAs) under the coordination

of the Department of Community Development. The YDF aligns with various national policies and strategies,

including the Youth Development Policy (2007), Community Development Policy (1996), National Economic

Empowerment Policy (2004), and Tanzania Development Vision 2025. It also contributes to the National

Strategy for Growth and Reduction of Poverty (NSGRP II) and the Sustainable Development Goals (SDGs).

The YDF provides 10% of LGA revenue as soft loans to marginalized groups, particularly youth and women,

who often lack collateral to access commercial bank loans (Daud, 2020). However, despite these initiatives,

youth unemployment remains high, and the sustainability of youth enterprises continues to be a concern. This

study therefore examines the effectiveness of the YDF in promoting youth entrepreneurship in Ilemela

Municipality.

INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)

ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025

www.rsisinternational.org

Page 7688

The current study therefore aims to identify the number of entrepreneurial training sessions provided to YDF

beneficiaries in Ilemela Municipality; to ascertain the number of youth-owned enterprises funded by YDF in

Ilemela Municipality, and to determine the sustainability rate of YDF-supported businesses in Ilemela

Municipality.

LITERATURE REVIEW AND THEORETICAL REVIEW

This study is anchored in Social Capital Theory (SCT), which posits that social networks, trust, and shared norms

enable individuals to access resources and opportunities more effectively (Putnam, 2000; Bourdieu, 2017).

Social capital facilitates cooperation, knowledge sharing, and mutual support, thereby fostering entrepreneurship

and collective development.

Within the context of youth entrepreneurship, SCT underscores the importance of networks and group

associations in accessing funding, mentorship, and markets. In Ilemela Municipality, the YDF operates largely

through youth groups, making social networks a critical factor in fund accessibility and enterprise sustainability.

When youth collaborate in cooperatives or business collectives, they enhance trust, resource pooling, and

collective risk management—factors that are vital for long-term business success.

Previous studies on youth development funds in Africa show mixed results regarding their effectiveness.

Chigunta (2017) found that while youth entrepreneurship schemes exist in Zambia, Ghana, and Nigeria, their

impact is often limited by poor management, lack of mentorship, and inadequate financial literacy In Tanzania,

Mussa (2013) examined the YDF in Kahama District and found that although awareness levels were high (77%),

only a small proportion (0.3%) of youth accessed the fund. The study cited insufficient funding, weak

entrepreneurship training, and delays in disbursement as key challenges. Similarly, Nyaki (2024) reported that

in Moshi Municipality, low initial capital, inadequate financial resources, and insufficient entrepreneurship

education hindered participation and sustainability of YDF-supported ventures. These studies underscore the

need for local-level assessments to understand contextual variations in YDF implementation and outcomes hence

the present study focusing on Ilemela Municipality.

METHODOLOGY

The study adopted a descriptive survey design and employed a mixed-methods approach combining quantitative

and qualitative techniques. This design allowed for an in-depth understanding of YDF’s effectiveness from both

numerical data and participant experiences. The target population comprised Youth Development Officers,

Community Development Officers, and YDF beneficiaries. Using purposive and convenience sampling, a total

of 110 respondents were selected. Data were collected through closed-ended questionnaires administered to

youth beneficiaries across six wards (Kitangiri, Shibula, Kayenze, Sangabuye, Kirumba, and Nyasaka) and semi-

structured interviews with key informants. The mixed approach ensured data triangulation and improved

validity. Quantitative data were analyzed descriptively using frequency tables and percentages, while qualitative

data were thematically analyzed to complement numerical findings.

Therefore, several ethical issues required careful consideration to ensure the integrity of the research and the

protection of participants, informed consent was obtained from all participants after clearly explaining the

purpose of the study, their voluntary participation, and their right to withdraw at any time without consequences.

Then, confidentiality and privacy was strictly maintained by ensuring that the information provided by

respondents is kept anonymous and used solely for academic purposes.

RESULTS AND DISCUSSION

Entrepreneurial training

Entrepreneurial training was identified as central to YDF’s implementation. Results showed that 82% of

beneficiaries had attended at least one training session. Topics included financial management, business

planning, and digital entrepreneurship. However, 18% reported not attending any training, suggesting uneven

INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)

ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025

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Page 7689

coverage and limited accessibility. Consistent with Social Capital Theory, these trainings not only transfer skills

but also strengthen peer networks crucial for information sharing and business collaboration.

Figure 1: Number of entrepreneurial training session

This findings aligns with Khoza (2018) found that Business Development Support (BDS) training positively

impacts entrepreneurship success through financial and non-financial training programs such as marketing,

innovation, risk-taking, and management skills .

Youth enterprises funded by YDF

Findings revealed that 73% of respondents had received YDF financial support ranging from TZS 1 million to

45 million. This funding enabled youth to start or expand businesses in agriculture, trade, and services).

Nonetheless, the relatively small proportion receiving higher amounts indicates capital insufficiency for scaling

up enterprises an issue that aligns with findings by Nyaki (2024) and Mussa (2013).

Table 1: Shows approximate amount of funding received

Approximate amount of funding received

Frequency

Percentage (%)

TSH TZS 1,000,000- 15,000,000

TZS 15,000,000 – 30,000,000

TZS 30,000,000 – 45,000,000

TZS 45,000,000 – 60,000,000

Above 60,000,000

Total

100

Nyaki (2024) found that while the Youth Development Fund (YDF) provides crucial financial support to youth

entrepreneurs, many beneficiaries still struggle with insufficient capital for scaling their businesses effectively.

In particular, the study highlighted that most recipients received amounts that were inadequate for significant

expansion, limiting their potential for growth in competitive markets. Similarly, Mussa (2013) reported that

access to funding through the YDF often falls short of what is necessary for youth-led enterprises to thrive,

revealing a gap between financial support and the needs of young entrepreneurs. Mussa emphasized that this

lack of adequate funding contributes to the stagnation of many youth-owned businesses, particularly in sectors

like agriculture and trade. Both studies underline the importance of increasing the funding limits within the YDF

to ensure that youth can not only start but also scale their businesses sustainably, thereby enhancing their

economic impact and reducing unemployment in their communities.

Sustainability of YDF-Supported Businesses

About 71% of the businesses funded had operated for over one year, while 30% had survived beyond two years.

This demonstrates moderate sustainability. However, only 23% of enterprises were expanding, and 33% were

10%

20%

30%

40%

One Two Three or

None

INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)

ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025

www.rsisinternational.org

Page 7690

struggling to survive. The main challenges identified included limited capital (52%), lack of business skills

(24%), poor management (17%), and restricted market access (7%). These challenges reveal that financial inputs

alone are insufficient without continuous training, mentorship, and structural support core aspects emphasized

by Social Capital Theory.

Table 2: Shows how long YDF-supported business operated

How long

Frequency

Percentage (%)

6–12 months

1–2 years

More than 2 years

Total

100

This finding aligns with, Mwasunda (2020) emphasizes that access to training and mentorship significantly

enhances the sustainability of youth-owned businesses, enabling them to adapt to market demands. Similarly, a

study by Olufemi (2020) highlights that an enabling business environment, characterized by supportive policies

and access to financial resources, is essential for the continuity of youth enterprises.

CONCLUSION

The study concludes that the YDF has contributed substantially to youth entrepreneurship in Ilemela

Municipality through financial support and entrepreneurship training. The fund has improved income levels,

business participation, and social networking among youth. Nevertheless, business sustainability remains a

challenge due to inadequate capital, limited market linkages, and gaps in managerial skills.

Overall, the study confirms the importance of integrating financial assistance with social capital enhancement,

through mentorship, peer networks, and continuous skill development, to ensure long-term entrepreneurial

success. ⁠The study recommends expanding entrepreneurship training by increasing the frequency, accessibility,

and content scope of entrepreneurship training to include financial literacy, marketing, and digital business skills.

Increase the YDF capital allocation to accommodate more beneficiaries and ensure adequate financing for

enterprise growth, establish follow-up mechanisms including mentoring, monitoring, and business advisory

services to improve sustainability, and encourage youth cooperatives and business associations that leverage

collective social capital for resource sharing and market access.

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INTERNATIONAL JOURNAL OF RESEARCH AND INNOVATION IN SOCIAL SCIENCE (IJRISS)

ISSN No. 2454-6186 | DOI: 10.47772/IJRISS | Volume IX Issue X October 2025

www.rsisinternational.org

Page 7691

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