Financial Literacy and Financial Inclusion of Youths in Nairobi City County, Kenya
Loading...
Date
0202
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
European Journal of Business and Management
Abstract
In an effort to promote greater financial inclusion, Kenya has implemented a number of financial sector changes
in recent years, propelled by technological innovations like ATMs and mobile banking. This expansion is seen as
key to achieving Kenya’s target growth rate of ten percent as outlined in Vision twenty thirty, by expanding
access to financial solutions, encouraging investments, savings, and supporting the country’s development
objectives. However, despite these advancements, access to formal financial services remains limited. This study
aimed to investigate the relationship between financial literacy and financial inclusion among the youth in
Nairobi City County Kenya, focusing on the roles of investment methods, debt management, financial planning,
and saving behaviours. The study was grounded in theories of information asymmetry, behavioural economics,
financial education, and financial growth. A causal research design was used, targeting a population of One
million nine hundred ninety, three thousand three hundred and ninety youths in Nairobi City County, with a
sample size of four hundred respondents. Data were collected using structured questionnaires, validated through
a pilot study with forty participants. Reliability was ensured with a Cronbach's alpha score, and the data were
analysed using descriptive and inferential statistics, including regression analysis. The study’s findings showed
that the four factors, saving behaviours, debt management, financial planning, and investing practices accounted
for ninety-two point eight of the variance in financial inclusion. Savings had a significant positive impact on
financial inclusion, with youths who regularly save better able to access formal financial services. Debt
management practices also positively influenced financial inclusion, albeit to a moderate degree, suggesting that
improved debt management skills could reduce financial exclusion. Financial planning techniques were strongly
associated with financial inclusion, indicating that youth who engage in organized financial planning are more
likely to access sanctioned financial assistance and make sound financial decisions. Investment practices had a
very strong positive impact on financial inclusion, emphasizing the importance of promoting investment literacy
among young people. The study concluded that fostering saving habits, debt management skills, financial
planning, and investment literacy is crucial to enhancing financial inclusion. It recommended that educational
institutions, financial organizations, and government agencies work together to incorporate financial literacy into
school curricula from an early age, to equip young people with the financial skills needed for greater financial
empowerment.
Description
Article
Keywords
Citation
Charles, K. M., & Musau, S. (2024). Financial literacy and financial inclusion of youths in Nairobi City County, Kenya. European Journal of Business and Management, 16(10), 64–72. IISTE. https://www.iiste.org