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Determinants of Tanzanian youth entrepreneurs' financial inclusion: Empirical evidence from a baseline survey in selected regions in Tanzania
Nsubili Isaga
Abstract
Financial inclusion is crucial for both developed and developing countries, sparking a worldwide debate on the key factors for success. This study investigates the determinants of financial inclusion among youth entrepreneurs in Tanzania. The study is guided by financial inclusion theory, which emphasizes access, usage and quality of financial services which focuses on enhancing economic outcomes. Understanding these determinants and the factors influencing youths’ decisions to engage with the financial system will aid in developing appropriate policies. This study adopted a cross-sectional design. Due to the unavailability of a comprehensive sampling framework, the study relied on the database of entrepreneurs registered with the Small Industries Development Organization (SIDO). Convenience sampling was used to select youth entrepreneurs aged 15–35 years across five regions in Tanzania. The study aimed to collect data from 2,300 youth entrepreneurs, with 1,949 contacted and 1,906 providing reliable data for analysis. The questionnaire data includes key information such as youth demographic characteristics, firm-specific characteristics, access to financial services, barriers to financial inclusion, and levels of crowdfunding awareness. A logistic regression model was developed to analyze the determinants of financial inclusion among youth entrepreneurs. The results revealed that financial inclusion among youth entrepreneurs is influenced by gender, age, financial knowledge, education level, awareness of financial institutions, and entrepreneurial loan advancement intention. The study further found that low business revenue hinders the decision to open a bank account. Other barriers include unawareness of available services, disinterest, and fear of bank charges. This study recommends the implementation of policies aimed at enhancing financial literacy, increasing awareness of financial services, and developing tailored financial products to address the unique needs of youth entrepreneurs.
