The Relationship Between Financial Knowledge and the Personal Financial Practices of the Youth in Kenya: a Case Study of the Financial Knowledge for Africa Programme
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Date
2013-10Author
Makhandia, Marion N
Type
ThesisLanguage
enMetadata
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The general objective of the study was to determine the relationship between financial knowledge
on the personal financial practices of the youth in Kenya. The study was guided by three specific
objectives: to determine the relationship between financial knowledge and the money management
practices of the youth in Kenya; to determine the relationship between financial knowledge and the
savings and investment culture of the youth in Kenya; and to establish the relationship between
financial knowledge and the financial risk management practices of the youth in Kenya.
A case study design was used. The population of the study comprised of all participants who
completed the Financial Knowledge for Africa (FIKA) training program. The research targeted
youth who were successfully trained and graduated, estimated at 182,096 people. A convenient
sample of 60 respondents was selected through snow-ball sampling technique. Recipients of the
FIKA training were evaluated against a control group that did not participate in the program. Data
was collected through the administration of a questionnaire whose measure of reliability yielded
Cronbach’s Alpha of .827. Independent sample t-test was used to compare the mean scores of the
data between the study group and the control group. Inferences were drawn using Spearman’s Rank
Correlation Coefficients and multiple regression modelling techniques. The data was analyzed using
SPSS and presented in figures and tables.
The study established that financial knowledge explained 44.7% of the variance in the financial
practices of respondents. Individual financial practices that could be explained by the FIKA program
were: timely bill payment, prompt debt collection, prioritization of expenditures and exercising due
diligence on loan terms. Financial knowledge had a limited effect on the savings and investment
practices of the individuals as it only increased the individual’s understanding of the concept of risk.
In terms of risk management, financial knowledge imparted through the FIKA training program
only resulted in an increased uptake of medical insurance. The study recommended that financial
literacy programs should be reinforced with initiatives that enhance the financial capability of
recipients of financial training for the program to have any significant impact.
Citation
Degree of Master of Business AdministrationPublisher
University of Nairobi School of Business
Description
A research project report submitted to the School of
Business, University of Nairobi in partial fulfillment of the
requirement for the award of a Masters Degree in Business
Administration