Youth development fund program inclusion and its effects in maximizing youth agri-enterprise return on investment in Tanzania: evidence from the Mara Region

Youth participation in agribusiness enterprises is essential for improving income, food security, and sustainable agribusiness, but limited access to finance, institutional support, and market information hinders the performance of their agri-enterprises. Thus, this study examined the effects of the Youth Development Fund (YDF) program inclusion on return on investment (ROI) among youth agri-entrepreneurs across all districts of the Mara Region, Tanzania. Cross-sectional data were collected from 499 (comprising 256 YDF beneficiaries and 243 non-beneficiaries) randomly selected youth using structured questionnaires and analyzed using descriptive statistics and econometric models, including covariate regression, propensity score analysis, and the Heckman two-step method. Descriptive results indicated that YDF beneficiaries had significantly higher ROI, larger loans, better repayment terms, timely disbursement, and greater financial literacy ( p  < 0.01). They also had improved access to extension services ( p  < 0.01), market information ( p  < 0.05), and cooperatives ( p  < 0.01). Economic analysis confirms higher revenue, profit, and ROI across all enterprise types (crops, livestock, and mixed farming). Econometric results confirmed that YDF participation significantly increased ROI by 6.5–7.8% ( p  < 0.05). Other significant determinants of ROI included loan size ( p  < 0.01), favorable repayment terms, timely disbursement ( p  < 0.05), financial literacy, enterprise size and experience, access to extension services and market information, cooperative membership, and access to other finance, while greater distance to market negatively affected ROI at p  < 0.05. The study concludes that YDF participation improves youth agri-enterprise performance and recommends expanding loan size, capacity building, timely loan disbursement, credit, and market access.