Effect of Strategic Asset Allocation on Financial Performance of Projects Funded by Youth Enterprise Development Fund in Turkana County, Kenya

Abstract

The Kenyan government expects that the projects funded by YEDF perform well financially for the benefit of the youth. However, there is poor financial performance as the projects funded by YEDF have been defaulting in loan repayment and the ideal loan recovery rate of 100% has never been achieved. This sought to determine the effect of strategic asset allocation on financial performance of projects funded by Youth Enterprise Development Fund in Turkana County, Kenya. The study was founded on modern portfolio theory. Descriptive cross-sectional survey research design was used. A total of 300 projects which are fully registered and funded by Youth Enterprise Development Fund in Turkana County, comprised the study population. The study involved managers from a sample of 172 projects which are registered and funded by Youth Enterprise Development Fund in Turkana County. Simple random sampling was used to select the projects whose managers took part in the actual study. A pilot study was conducted in order to test the reliability of the research questionnaire and ensure its validity. Content validity of the research questionnaire was ensured through consultations with the supervisor while reliability was tested using Cronbach’s alpha coefficient. Structured questionnaires were used to collect data. Both descriptive and inferential statistics were used for analyzing data. Descriptive statistics included frequency tables, percentages, means and standard deviations. Inferential statistics included multiple regression analysis and Pearson product moment correlation. Inferential statistics included multiple regression analysis and Pearson product moment correlation. It was noted that strategic asset allocation significantly predict financial performance (β₃ = 0.561; p < 0.05). It was concluded that strategic asset allocation and tactical asset allocation significantly affect financial performance. It was recommended that strategic asset allocation should be enhanced in order to improve financial performance of projects funded by YEDF in Turkana County, Kenya.

Key words: Strategic Asset allocation, financial performance, youth enterprise development.

DOI: 10.7176/HRL/56-03

Publication date: July 30^th 2025