Financial Literacy and Personal Retirement Planning Among Public Sector Employees in Bukavu City, the Democratic Republic of Congo
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Date
2021
Authors
Safari, Kulondwa
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Many retirees are confronted with the problem of having an insufficient income to sustain their
living costs. Pension plans are designed to help retirees to save a part of their income during the
working years for future use during their retirement. In the Democratic Republic of Congo,
pension schemes are inexistent and many employees have been shifting to personal retirement
plans. More than 50% of employees do not have personal retirement plans. The general objective
of this research was to investigate the effect of financial literacy on personal retirement
preparedness among public sector workers in the Democratic Republic of Congo. The study was
carried out in the city of Bukavu, one of the populated cities in the country. The specific
objectives were to measure the effect of financial knowledge, computation capability, financial
education, and risk attitudes toward financial products on retirement planning among public
sector workers in Bukavu city. The population targeted in this study was constituted by public
sector employees working for institutions under provincial government control as well as those
under national government control. This study used purposive sampling and stratified sampling.
The sample size for this study was 396 public sector employees. This study was supported by the
life cycle theory, expected utility theory, and the theory of planned behavior. Descriptive and
causal research designs were used in the present research. Logistic regression was used to verify
the research hypothesis. A survey questionnaire was used to gather the primary data. The data
gathered were processed using SPSS 21. The results in the estimated model showed that
Financial knowledge is statistically significant with a p-value below 0.05, Computation
capability is statistically significant with a p-value of below 0.05, Financial education is not
statistically significant with a p-value over 0.05, and Risk attitudes toward the financial product
is not statistically significant with a p-value over 0.05. Thus, Financial knowledge and
Computation capability influence significantly personal retirement planning. The findings from
the study support therefore that retirement planning has been influenced by the level of financial
literacy of public sector employees in the city of Bukavu. The study recommends to public sector
employees to improve their level of financial literacy for better living conditions during their
retirement period and to policymakers to organize financial literacy training for public sector
employees in the Democratic Republic of Congo.
Description
A Research Project Submitted to the School of Business in Partial Fulfillment of the Requirement for the Award of the Degree of Masters in Business Administration (Finance Option) of Kenyatta University November 2021
Keywords
Financial Literacy, Personal Retirement Planning, Public Sector Employees, Bukavu City, Democratic Republic of Congo