IMPACTS OF FINANCIAL LITERACY ON ECONOMIC EMPOWERMENT OF SMALL SCALE WOMEN TRADERS IN KISII COUNTY, KENYA

Abstract

The study sought to find out the effects of financial literacy on the performance of small scale
women traders in South Mugirango sub-county. Small scale women traders in South
Mugirango sub-county have continued to show limited growth if not retardation. The need for
financial literacy skills has become significant with the emphasis of economic empowerment
of women. Low levels of financial literacy skills or lack of it among small scale women
traders inhibit their growth hence diminish their economic success. The study objectives
were; to find out the relationship between budgeting practices and the performance of small
scale businesses among women traders, to determine the effects of book-keeping practices on
the performance of small scale businesses among women traders, to establish the effects of
credit management practices on the performance among small scale women traders, traders
and to find out the challenges experienced by women in accessing financial literacy training
programmes in South Mugirango Sub-County. The study was guided by the financial literacy
theory. The descriptive Survey research design was used to guide the study. The target
population for the study was registered small scale women traders who were beneficiaries of
Equity Group Foundation project in South Mugirango Sub-County. A sample size of 34%
trained small scale women traders and untrained small scale women traders was selected
through random sampling technique. Primary data was obtained using questionnaires
administered to the two groups; and key informant interviews with women traders and EGF
Credit officers. Data collected was then organized, coded and entered in the computer for
analysis. Quantitative analysis yielded frequency distributions, one-way Analysis of variance
(ANOVA) with F-statistic, as well as cross tabulations with Chi-square statistic, t-test was
used to analyze the differences in performance between the trained and the untrained. The
study findings revealed that budgeting skills acquired through financial literacy programmes
played significant roles in growing sales, profits and ensuring smooth running of the
business. However, some women traders did not carry out any budgeting in their business
citing household commitments. In addition, Credit management skills played key roles in
enhancing performance of SSEs through facilitation to acquire and manage loans to ensure
that loan liability was minimized. Results further indicate that most women traders do not
keep proper books of account. However, for those practicing book keeping the skills obtained
influenced the performance of their businesses by providing them with mechanisms for
tracking performance, and accurate decision making. The findings further revealed that
women traders who had undergone financial literacy training performed better than those
who had not. Results also revealed that financial literacy training had a significant positive
impact on the performance of small scale businesses among women traders.