Effect Of Financial Literacy On Investment Decisions Among Digital Customers Of Microfinance Banks In Nairobi Kenya
Year: 2024
Type: article
Study design: Observational Study
Abstract: In the developing nations, low-income individuals often lack access to regular income streams to cope with unforeseen events. Microfinance banks exist to provide low-income individuals with alternative financial solutions when they are turned away by traditional banks. Nonetheless, accomplishing this existence is made more troublesome or unimaginable due to lack of financial literacy. From a population of approximately 50 million individuals, only 38% of Kenyans are financially literate according to the Global Financial Literacy Survey report (2021). The poll further shows financial literacy levels of other nations. For example, Uganda's rate was 34%, while Tanzania and South Africa were rated at 40% and 42% accordingly. Moreover, it is worth noting that Kenya Vision 2030 (2008), outlined the desire for the country to achieve an 80% financial literacy level by the end of year 2012. These statistics demonstrate that people are ill-prepared to deal with the changes taking place in the field of finance. The research explored the effect of financial literacy on investment decisions among digital customers of microfinance banks in Nairobi, Kenya. The expected utility hypothesis, the hypothesis of planned behaviour, and the dual process hypothesis guided as the establishment for this examination. The outcome of the research revealed that there was a positive and significant relationship between financial behaviour and investment choices made by digital customers of microfinance banks. Financial knowledge and investment decisions were found to have a statistically significant and positive effect among microfinance banks digital clients. Lastly, the research revealed a strong and positive link between financial attitude and investment decisions made by digital clients of microfinance banks in Nairobi Kenya. The study recommended that microfinance bank digital customers should be conscious of their personal financial behavioral and take necessary measures to minimize impact on their investment decisions
Author: . .
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4405079373