Effects of financial literacy on the growth of micro enterprises funded by Uwezo fund in Nairobi County, Kenya
Date
2020-10
Authors
Muriithi, Jane Wanjiru
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
The need for financial literacy by micro enterprises has been emphasized by different scholars. Financial literacy is the mastery of a set of knowledge, attitudes and behaviors. The purpose of the study was to establish the effects of financial literacy on the growth of micro enterprises funded by Uwezo Fund in Nairobi County, Kenya. Specifically, the study sought to establish the effects of debt management literacy, budgeting skills literacy, bookkeeping literacy and banking services literacy on the growth of micro enterprises funded by Uwezo Fund in Nairobi County.This study used descriptive research design. The target population for this study was 1859 micro enterprise in Nairobi County that received a financing facility from Uwezo Fund, from where a sample of 329 respondents was selected. The study collected primary data using questionnaires. Quantitative data collected was analyzed by the use of descriptive statistics and presented through percentages, means, standard deviations and frequencies. The information was displayed by use of bar charts, graphs and pie charts and in prose-form. The study adopted multiple regression models was used to establish the strength and direction of the relationship between the independent variables. The study established that debt financing literacy had a positive significant influence on growth of micro enterprises funded by Uwezo Fund in Nairobi County; budgeting skills literacy had a positive and significant influence on growth of micro enterprises funded by Uwezo Fund in Nairobi County; bookkeeping literacy had a positive and significant influence on the growth of micro enterprises funded by Uwezo Fund in Nairobi County and banking service literacy had a positive significant influence on growth of micro enterprises funded by Uwezo Fund in Nairobi County. Therefore, increasing banking service literacy by a single unit will result to an increase in growth of micro enterprises. The study recommends UWEZO fund to educate its beneficiaries before extending loans to them; this will ensure their financial management is enhances. To enhance efficiency in budgeting, the study recommends micro enterprises to embrace updated software that keeps a detailed trail of destructions affecting the operations of the business in case of funds shortfall or late facilitation. In regard to the suggestions for the further studies, the study therefore suggests that a replication of the research study in other counties to facilitate comparison and generalization of the research findings. Additionally, this study suggests that a research should be conducted on challenges encountered when accessing Uwezo Fund and their effects on growth of micro enterprises. Finally, this study further suggests a replication of the research study in other enterprises funded by other organizations such as Youth Enterprise Development Fund (YEDF).
Description
A Thesis submitted in partial fulfillment of the requirements for the award of the Degree of Masters of Business Administration at Strathmore University Business School
Keywords
Financial literacy, Micro enterprises, Debt management