Impacts of Financial Literacy on Economic Empowerment of Small Scale Women Traders in Kisii County, Kenya
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The study sought to find out the effects of financial literacy on economic empowerment of small scale women traders in South Mugirango sub-county. Small scale women traders in South Mugirango sub-county have continued to show limited growth if not retardation. The need for financial literacy skills has become significant with the emphasis of economic empowerment of women. Low levels of financial literacy skills or lack of it among small scale women traders inhibit their growth hence diminish their economic success. The study objectives were; to find out the relationship between budgeting practices and economic empowerment among small scale women traders, to determine the effects of book-keeping practices on economic empowerment among small scale women traders, to establish the effects of credit management practices on economic empowerment among small scale women traders and to find out the challenges experienced by women in accessing financial literacy training programmes in South Mugirango Sub-County. The study was guided by the financial literacy theory. The descriptive Survey research design was used to guide the study. The target population for the study was registered small scale women traders who were beneficiaries of Equity Group Foundation project in South Mugirango Sub-County. A sample size of 34% trained small scale women traders and untrained small scale women traders was selected through random sampling technique. Primary data was obtained using questionnaires administered to the two groups; and key informant interviews with women traders and EGF Credit officers. Data collected was then organized, coded and entered in the computer for analysis. Quantitative analysis yielded frequency distributions, one-way Analysis of variance (ANOVA) with F-statistic, as well as cross tabulations with Chi-square statistic, t-test was used to analyze the differences in performance between the trained and the untrained. The study findings revealed that budgeting skills acquired through financial literacy programmes played significant roles in growing sales, profits and ensuring smooth running of the business. However, some women traders did not carry out any budgeting in their business citing household commitments. In addition, Credit management skills played key roles in enhancing performance of SSEs through facilitation to acquire and manage loans to ensure that loan liability was minimized. Results further indicate that most women traders do not keep proper books of account. However, for those practicing book keeping the skills obtained influenced the performance of their businesses by providing them with mechanisms for tracking performance, and accurate decision making. The findings further revealed that women traders who had undergone financial literacy training were more economically empowered than those who had not. Results also revealed that financial literacy training had a significant positive impact on economic empowerment on small scale women traders. Despite the importance of financial literacy trainings, the programmes are not gendered so as to accommodate the interests of the small scale women traders. The effects of financial literacy skills are evident in economically empowering small scale women traders. The government and Non-governmental organizations should therefore initiate and fund gender-responsive financial literacy programmes throughout the country as a strategy to economically empower small scale women traders.