Financial literacy amongst women entrepreneurs in Kenya: a value-added product for economic empowerment.
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Date
2018
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University of Zululand
Abstract
Human civilisation has been characterised by numerous revolutions, with the most recent one being the information revolution. Information is driving development in all spheres of life: social, political, economic, health and human services. For effective utilisation of information, a special kind of literacy beyond functional literacy or the ability to read and write is required. This kind of literacy is what is commonly referred to as Information literacy (IL). Researchers are increasingly designating several types of literacy. Financial literacy, which is the ability to understand the fundamentals of money management, namely budgeting, spending, saving, investment, the use of financial products and services like government financial assistance programmes, banking and insurance; basic numeric skills and debt levels, is at the core of this study. The overall aim of the study was to establish the financial literacy competences of women entrepreneurs and determine their impact on women’s economic empowerment. The overall aim of the research was to identify the financial literacy skills of women entrepreneurs and to study their role in women's economic empowerment. The study's objectives were: 1) To determine the financial literacy skills of women entrepreneurs in Kenya; 2) To determine the level of economic empowerment of women entrepreneurs. 3) To determine the relationship between financial literacy and women's economic empowerment and 4) To suggest a model for the enhancement of the financial literacy skills of women entrepreneurs in Kenya. The following research questions were addressed to realise the objectives of the study:
1) What are the financial literacy skills of women entrepreneurs in Kenya?
2) What is the level of economic empowerment of women entrepreneurs?
3) What is the relationship between women’s financial literacy and their economic empowerment?
4) Which is the best model for enhancing financial literacy skills of women entrepreneurs in Kenya?
The study used the mixed method approach which is normally associated with Pragmatic paradigm. The study combined the Positivist/postpositivist approach, which is associated with quantitative data, and Constructivist approaches which emphasise the socially constructed nature of reality and are therefore associated with qualitative data. The study was carried out using the survey research design because of its ability to capture the complexities of the issues under study using only a small sample of the population. Purposive sampling was used to select 105 women’s groups who had obtained loans from the Uwezo Fund in Chuka Constituency in the financial year 2013/2014. Both random and stratified sampling technique was applied to select the women entrepreneurs who formed the sample. The number of respondents from each stratum was proportionate to the size of the different strata of enterprises funded. In order to reduce possible sampling error, a total of 400 respondents were selected. Detailed questionnaires with both structured and open-ended questions were used to collect data. Discrete data was analysed using the Statistics and Data (STATA) package to generate descriptive statistics such as frequencies (counts) and percentages to describe data on the various variables. Cross-tabulation analysis was conducted to simultaneously analyse the relationship between two or more variables in the study. Causal analysis that is concerned with the study of how one variable affects changes in another variable, was used to determine how financial literacy skills affect women's economic empowerment, which is one of the research questions. A chi-square test of independence was then carried out to assess the degree of association between these variables. Research findings confirm that financial literacy skills are a major factor in women's economic empowerment, but that some financial literacy skills have a greater impact than others. Women entrepreneurs acquire financial literacy skills through social constructionism. Lack of financial literacy skills is hindering women entrepreneurs from becoming economically empowered. A willingness to invest in a risky business venture 239 (62.57%), lack of basic numeric skills 237 (61.88%), and taking loans without considering the cost 88 (71.42%) is undermining women’s economic empowerment. This is demonstrated by the fact that 78 (20.47%) of the respondents feel that their financial status is out of control and 153 (40.26%) feel uncomfortable about their current debt status. This study proposes that regular assessment of women entrepreneurs’ financial literacy skills be carried out and tailor-made training courses to fulfil these needs be introduced. Priority should be given to topics such as computing, loans, reading and understanding bank statements, budgeting, spending, saving and investing in business ventures. In order to increase the number of women entrepreneurs included in formal financial services, financial institutions should offer women financial products that suit them.
Description
A dissertation submitted to the Faculty of Arts in fulfillment of the requirements for the Degree of Doctor Of Philosophy in the Department of Library and Information Studies at the University Of Zululand, 2018
Keywords
financial literacy --women entrepreneurs --economic empowerment --Kenya