Influence of Business Training and Financial Literacy on Loan Repayment in Devolved Fund Programmes by Women Entrepreneurs in Homabay County, Kenya
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Date
2025-06
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Kenyatta University
Abstract
Over the years, women entrepreneurs have immensely contributed to a nation’s economic development and growth. However, they face a number of challenges including discrimination, finance inaccessibility, loan default, inadequate training in entrepreneurship, and inexperience. Women-oriented microfinance institutions have emerged to leverage women entrepreneurs from the discrimination and funds inaccessibility challenges. However, women entrepreneurs in Kenya still register high levels of loan default. This study assessed how business training and financial literacy influenced loan repayment among Homabay women entrepreneurs engaging in devolved funds programmes. Financial Literacy Framework and the Human Capital Theory guided the study. Data was collected from 397 licensed women entrepreneurs using a structured questionnaire through person-to-person interview. The study adopted descriptive and inferential statistics to analyze the data. A multiple linear regression approach was used to establish the influence of financial literacy and business training on loan repayment. The study sent out 397 questionnaires, but only 359 were completely responded to, giving a 90.43 per cent response rate. The study observed that majority of women entrepreneurs participating in the devolved funds programmes in Homabay County were financial literates, had attained a business training, and were aware of loan repayment. The study found a positive correlation between business training and loan repayment, with a correlation coefficient of 0.839. Additionally, it identified a strong positive relationship between financial literacy and loan repayment, with a coefficient of 0.805. The regression analysis revealed that a unit increase in financial literacy would enhance loan repayment by 0.389 among women entrepreneurs. Similarly, a unit increase in business training would boost loan repayment by 0.571. These coefficients were statistically significant at the 5 per cent level. The study concluded that financial literacy and business training are significant contributors of loan repayment in devolved funds programmes by women entrepreneurs in Homabay County. The study recommends that business training sessions and financial literacy campaigns should be offered to women entrepreneurs to enhance their loans repayment rate.
Description
A Research Project Submitted to the Department of Applied Economics in Partial Fulfillment of the Requirements for the Award of Master of Economics (Cooperation and Human Development) Degree of Kenyatta University, June 2025.
Supervisor
Perez.A Onono-Okello