Influence of financial literacy training on the performance of village savings and loan associations supported by NGO’s in Kenya: a case study of VSLA’s in Kwale county
Onyango, Edward Clement
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Studies in Kenya largely indicate that VSLA’s have been adopted as a strategy to alleviate poverty in non-formal settlements like the slums in Mathare, Kibera, Korogocho and Kianduti villages or slums for more than 10 years now. Despite these gains there is very scanty information available on the financial literacy of the members of these groups and the impact it has on their performance. Establishment of Voluntary Savings and lending Associations has a had a great impact in ensuring there is economic empowerment of members and groups in the villages through donor fundings.It is from this background that this research intended to determine if there is an influence of financial literacy trainings on the financial performance of village Savings and Loan Associations (VSLA’s) projects in supported by NGO’s in Kenya, a case study of Kwale county. The study was done on the members of the VSLA’s in Kwale County who are registered within the groups in that region. There was a total of 73 participants in the study undertaken. The hypothetical question was to establish if financial knowledge has an impact on the financial performance of the VSLA’s supported by NGO’s in Kenya. The study used stratified sampling method and questionnaires in collecting required information through interviews. The findings showed that there was a strong relationship between financial literacy and financial performance of VSLA’s. this led to a conclusion that there is need to ensure the groups are empowered properly since most of the VSLA that have not been performing well have their members not well trained on financial literacy components such as budgeting, expenditure control and savings.