An Assessment of the Contribution of Youth SMEs to the Economy of Igembe South Sub-County

Purpose: The purpose of this study is to assess the contribution of youth-owned Small and Medium Enterprises (SMEs) to the economy of Igembe South Sub-county, Kenya, focusing on the prevalence, economic impact, and challenges faced by youth entrepreneurs. Methodology: The study adopted a descriptive research design and used a stratified random sampling technique to select 200 youth entrepreneurs from various sectors in Igembe South Sub-county. Data was collected using structured questionnaires and analyzed using SPSS and Excel for both qualitative and quantitative data. Results: The study found that youth SMEs in Igembe South play a significant role in job creation, with most businesses employing 1-5 staff. Key sectors include M-Pesa, retail (Mitumba), and hospitality. The majority of businesses are relatively new, with 37% in operation for less than 2 years. Most entrepreneurs started with capital between Ksh. 50,000-100,000 and reported profit margins of Ksh. 10,000-15,000. However, youth SMEs face challenges such as over-taxation, limited government support, lack of resources, and outdated technology, which hinder their growth potential. Unique Contribution to Theory, Practice, and Policy: This study contributes to the understanding of the role of youth SMEs in local economic development, emphasizing their potential in job creation and economic empowerment. It provides policy recommendations for the Kenyan government to enhance support for youth entrepreneurship through tax reforms, better access to funding, and targeted training. The study highlights the need for more effective government programs to address the challenges faced by youth SMEs in Igembe South and similar regions.