Financial Literacy and Investment Decisions Among Middle and Long-Distance Elite Athletes in Kenya
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Date
2024-05
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Kenyatta University
Abstract
Kenya is known internationally for producing middle- and long-distance champions in
athletics. This has been attributed to its dominance in middle- and long-distance races
which have exhibited comparable dominance in these races. Most of these athletes are
young with no complete formal education. The issue around financial literacy and its
relevance to sports remains unresolved. The objective of this study was to examine the
impact of financial literacy on the investment decision-making process among middle and long-distance elite athletes in Kenya. The primary aims of this study were as
follows: first, to examine the impact of financial knowledge; second, to assess the
influence of saving habits; and third, to evaluate the effect of awareness of investment
opportunities on investment decision-making among middle- and long-distance elite
athletes in Kenya. The study was supported by four theories: goal setting theory,
financial literacy theory, absolute income theory, and permanent income hypothesis.
The research design employed in this study was descriptive in nature. A total of 1,695
athletes specializing in middle- and long-distance events, and based in Kenya, were
included in the study. From this population, a sample size of 318 athletes was selected,
the researcher took into account both stratified and purposive sampling methodologies
in order to identify the specific participants. Data collection was conducted using
structured questionnaire. The study included correlation analysis and a multivariate
regression model to assess the hypotheses. The research results were presented through
the utilization of graphical representations and tabular formats. The researcher
demonstrated adherence to research ethics by obtaining a permit letter and a NACOSTI
license in order to conduct the research. The findings revealed that the participants
exhibited a lack of knowledge of the functioning of the Nairobi Securities Exchange
(NSE). Moreover, it was observed that athletes engaged in moderate buying and selling
activities of ordinary shares, preference shares, and bonds for various firms inside the
NSE. The findings of the study revealed that a significant proportion of the participants
expressed a tendency to infrequently allocate a portion of their profits following each
successful race for the purpose of saving. The findings of the survey revealed that a
significant proportion of the participants expressed a modest level of awareness
regarding various investment prospects both domestically and internationally. The
findings of the study suggest that the allocation of investments in real estate, business,
and financial assets in the region was only partially and inadequately executed. The
findings of the research indicated that the level of literacy among the participants was
significantly low. The team had a limited understanding of fundamental concepts in
financial literacy, including the overall inflationary trend in the economy, the concept
of time worth of money, and the potential misperception of cash holdings. It is
imperative that athletes obtain the necessary knowledge that will serve as the
fundamental basis for an effective investment strategy. By acquiring such knowledge,
athletes will enhance their ability to develop a robust investment plan that is resilient to
inflation. Hence, it is imperative for athletes to actively pursue financial counsel, as
there exists a multitude of advisors who can offer them the necessary assistance,
direction, and expertise required to construct a robust investment strategy that ensures
long-term viability, while safeguarding against potential financial setbacks stemming
from the prevailing economic climate.
Description
A Research Project Submitted to the School of Business, Economics and Tourism in Partial Fulfillment of the Requirement for the Award of the Degree of Master of
Business Administration (Finance Option) of Kenyatta University May, 2023
supervisor.
Charity Njoka