An investigation into the factors causing financial literacy A survey of Municipal council of Nyeri employees
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Date
2014-07-08
Authors
Musau, Daniel Mutisya
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Abstract
In an increasingly risky and globalized marketplace, people must be able to make well-informed
financial decisions. Interest in exploring the issues of personal finance, particularly money
management, has tremendously increased in recent years due to the society's awareness on its
importance. This research stressed 011 the causes of financial literacy, by looking into the
individual's background, financial attitude, financial knowledge and family. Financial literacy is
an active process, in which communicating information is only the beginning: empowering
consumers to take action to improve their financial well-being is the ultimate goal. Financial
literacy is critical for promoting access to finance by creating incentives and environments that
promote desired financial behaviors such as saving, budgeting, or using credit wisely. The
objective of this paper was to examine the causes of financial literacy and its effect on personal
financial management practices that encompasses Savings practices, Expenditure practices, Debt
management, Investment, Money management, retirement and unexpected expenses.
Specifically, the study was conducted in Nyeri Municipal council. The variables for the study
were social factors, economic factors, psychological factors and personal financial management
practices. The target population was ninety two employees of the Nyeri Municipal council. A
census study was conducted. As at July 20.12, there were ninety two employees in Nyeri
Municipal council. For the purpose of collecting primary data the researcher used questionnaire.
Data collected from respondents was both quantitative and qualitative in nature. The data
collected was analyzed by means of descriptive statistical methods, which was facilitated by use
of Statistical Packages of Social Sciences Programme. The data was analyzed using Pearson
correlation analysis. This method was opted for because the study generated categorical data. A
multiple regression of the form Y = ~o + ~ JX~ + B 2X2 +- ~ 3X3 + e was used to ascertain the
extent to which independent variables predict financial literacy. The analyzed data is presented in
form of charts, graphs which guide in making recommendations on causes of financial literacy
and its effect on personal financial management practices.
Description
Department of Business Administration, 48p. 2013, HG 179 .M8