Relationship Between Risk-Taking and the Growth of Youth Owned Enterprises in Kenya

Abstract

Purpose: Youth businesses play a key role in poverty alleviation when run based on entrepreneurial orientation. However, these micro and small enterprises face a mix of achievement and frustration, with previous findings showing that three out of five companies fail within the first few long periods of activity, despite government efforts to improve the sector. This study aimed to examine the relationship between risk-taking and the growth of youth-owned enterprises in Kenya. Methodology: The study is supported by expected utility theory. A cross-sectional survey methodology was utilized which incorporated qualitative and quantitative research methods. A stratified sampling technique was employed to obtain 397 SMEs from 55,300 SMEs registered by the seven selected counties in Kenya namely; Nairobi, Murang’a, Nakuru, Machakos, Mombasa, Kisii, and Isiolo counties. Data was analyzed using descriptive and regression analysis. Results: The study findings demonstrate that risk-taking had a positive association with the growth of youth-owned enterprises in Kenya. Conclusion: The study concluded that risk-taking helps youth-owned businesses in Kenya to expand. The study suggested that owners of youth businesses should focus on how to carry out a thorough risk assessment and oppose any risk related to financial, social, and psychological risk respectively.