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Beyond technical skills training: The impact of credit counseling on the entrepreneurial behavior of Ugandan youth

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Listed:
  • Maria Laura Alzua
  • Maria Josefina Baez
  • Samuel Galiwango
  • Daniel Joloba
  • Benjamin Kachero
  • Maria Adelaida Lopera
  • Juliet Ssekandi
  • Zeridah Zigiti

Abstract

There is low take‐up of financial credit among youth in Uganda because potential beneficiaries perceive associated risks as high. This study assesses the determinants of entrepreneurial risk tolerance among Ugandan youth using experimental data from a randomized control trial and a real‐life investment‐risk experiment. Credit counseling was provided to young men and women aged 18–35 who owned a business to educate them about the obligations and commitments associated with financial credit. The intervention had a significant impact on demand for credit and related intermediate outcomes such as ownership of a bank account and investment in assets. The study finds that youth exhibited lower demand for credit after business training because of increased awareness regarding the actual risks associated with receiving credit. Our findings reinforce national strategies to promote soft skills for business entrepreneurship that extend beyond standard business training.

Suggested Citation

  • Maria Laura Alzua & Maria Josefina Baez & Samuel Galiwango & Daniel Joloba & Benjamin Kachero & Maria Adelaida Lopera & Juliet Ssekandi & Zeridah Zigiti, 2020. "Beyond technical skills training: The impact of credit counseling on the entrepreneurial behavior of Ugandan youth," Review of Development Economics, Wiley Blackwell, vol. 24(3), pages 750-765, August.
    • Handle: RePEc:bla:rdevec:v:24:y:2020:i:3:p:750-765
    DOI: 10.1111/rode.12706
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    References listed on IDEAS

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    Cited by:

    1. Beber, Bernd & Lakemann, Tabea & Schnars, Regina & Lay, Jann, 2024. "Employment effects of skills trainings in Sub-Saharan Africa: A systematic review of recent randomized controlled trials," Ruhr Economic Papers 1080, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    2. Dileni Gunewardena & Abdoulaye Seck, 2020. "Heterogeneity in entrepreneurship in developing countries: Risk, credit, and migration and the entrepreneurial propensity of youth and women," Review of Development Economics, Wiley Blackwell, vol. 24(3), pages 713-725, August.
    3. Daniel Vankov & Borislav Vankov, 2023. "Entrepreneurship education 2-in-1: Helping young Bulgarians become more entrepreneurial in a 10-month parallel-group randomized trial," Journal of Innovation and Entrepreneurship, Springer, vol. 12(1), pages 1-23, December.

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