Contribution of Local Government Loans to Youths on Income Increment: a Case Study of Mafinga Town Council, Iringa Region, Tanzania

This study assessed the contribution of local government loans to youths on income increment in Mafinga Town Council, Iringa Region. The study used cross-sectional survey design and the sample of population selected from four (04) wards. The study used mixed approach which involved both quantitative and qualitative methods. The study collected data using interviews and Focus Group Discussion for qualitative approach and questionnaires for quantitative approach. The study showed that the presence of Income Generating Activities (IGA) before the provision of loans to Youths by Local Government Authorities (LGA) was low because large number of youths 63 (44.1%) had no IGA and only a few youth 43 (30.1%) and 37 (25.9%) showed that they had IGA. However, after getting loans from LGA showed that most youths had income generating activities compared to before. Types of IGA before loan provision to youths was found to be farming 43(30.1%) and livestock keeping 37 (25.9%) After the provision of loans to youths by LGA, the types of IGA were motorcycle driving g (Bodaboda) 19 (13.3%), block making 8 (5.6%), hairdressing 31 (21.7%), livestock keeping 33 (23.1%), tailoring mart and embroidery 14 (9.8%), carpentry 18 (12.6%) and farming 20 (14.0%). Generally, the results showed that more IGA were realized after the youths received loans from LGA. Based on the findings of the study, it is recommended that LGA loans provided to youths aimed at income increment through small enterprise development and use of financial instruments and other support to youths’ employment or IGA. In line with the study results, it can be concluded that governments’ provision of loans to empower youths in the country has an advantage of improving economic youths’ status in income increment through the benefit obtained from IGA. It is recommended that youths in the country are to attain the pre-stated objectives of the loans provision toward youths’ income increment.