Financial Literacy and Financial Management of the Youth Enterprise Development Fund in Konoin Constituency Kenya

Abstract

Financial literacy is low both globally and locally. This is due to the fact that many people do not possess the necessary skills to manage their finances effectively leading them to mistakes that can otherwise be avoided. Financial illiteracy is mainly indicated by the rising level of personal debt and lower personal saving rates among individuals. Financial literacy is a very vital skill in the management of finances for it helps an individual avoids financial mistakes which in turn lead to financial independence. A cross sectional descriptive survey technique was adopted to find out the financial Iiteracy and financial management of the youth enterprise development fund in Konoin constituency. A representative sample of 250 respondents was selected using random sampling technique. The study used primary data which was collected from the respondents using a detai led questionnaire which had both open ended and close ended questions. Data was then analyzed by using regression analysis and descriptive statistics which was presented using mean, correlation, standard deviation and percentages. The analysis was then visually displayed using graphs, frequency tables and charts. Based on the findings financial literacy had a direct relationship with financial management with many youth lacking the basic skills in financial planning practices. The level of financial literacy among the youth was low which was attributed by low level of financial knowledge, less exposure to managing finances and also their education levels. It was also found out that parent and peers played a crucial role in transferring knowledge to the youth. The study recommends that government should come up with more intensive financial literacy programs where the youth are trained prior to receiving the funds these will greatly combat losses and the youth will be able to deal with the complex financial system which will greatly contribute to growth of the economy and achievement of vision 2030.