Effect Of Gender On Financial Literacy In Nairobi County

Abstract

Women have lower knowledge level making it difficult for them to perform financial calculations which eventually hinders their ability to make responsible financial decisions. In patrilineal communities, men are the bread weaners and know from early childhood that they will lead household financial decisions. In such societies, men are highly likely to have superior financial knowledge. The research objective was to ascertain the effect that gender has on financial literacy in Kenya. The particular objectives were to identify difference in the financial literacy levels of men and women and to investigate the extent to which gender affect financial literacy. The study was informed by gender schema theory, theory of planned behavior and prospect theory. The study utilized a descriptive research design. 2,192,452 males and 2,204,376 females formed the target population of the study. A sample of 191 men and 193 women was derived by utilizing the Cochran formula. The research made use of primary sources of data majorly with the utilization of a closed ended questionnaires as the study data collection tool. This was a cross-sectional study. The study applied both descriptive statistics as well as inferential statistics that entailed multiple linear regression analysis. A multivariate analysis was employed, each dependent variable was regressed against the independent variables. Ordinal regression was done for the first two models entailing financial attitude and financial behaviour as the respective response variables because the analysis technique predicts an ordinal dependent variable. For the third model entailing financial knowledge as the response variable, a multinomial logistic regression was utilized because the analysis technique is used to predict a nominal dependent variable. The study findings established that the financial literacy aspects entailing financial attitude, behaviour, and knowledge were exhibited to a very large extent among individuals living in Nairobi County. Another finding was that being a female would lead to poorer financial behaviour. The study also revealed that people living with partners are more likely to have better financial behaviour than people who are divorced/separated. Further study findings were that the background and demographic characteristics do not significantly influence the financial literacy aspects entailing financial literacy and therefore cannot significantly predict financial literacy. Policy recommendations are made to the Kenyan Ministry of Public Service and Gender to identify and implement gender sensitive financial literacy training programs accommodating the distinct characteristics and challenges of genders. Recommendations are also made to curriculum and education policy makers to make personal finance a required course in learning which will significantly equip the female gender with fundamental knowledge and skills to prosper in modern financial environment. Recommendations are made to the general Kenyan community to increase the literacy levels of the female gender because elevating gender financial literacy differences by instituting interventions will help in bettering the society as a whole. Finally, rrecommendations are also made to employers to boost financial literacy levels among the female gender by for instance, organizing seminar-based programs that are of an interactive nature; seminars on retirement which can promote accumulation of wealth and cushion financial insecurity in retirement as this will in turn boost employee productivity.