Influence Of Financial Literacy Trainings On Youth Self Employment In Kenya: A Case Of Thika Town Constituency

Abstract

Financial literacy plays a critical role in influencing the positive financial behaviors’ and member participation in pension schemes in addition to reducing debt loads, knowledge gains and accumulating wealth and managing it effectively. Financial literacy enhances the development of new financial products, the complexity of financial markets, and the changes in political, demographic, and economic factors. However, in developing countries like Kenya, the informal markets dominate the economic scene, yet rarely do the self-employed receive any formal training or financial literacy programmes to assist them on how to run their businesses in order to build knowledge and capacity, as well as to minimize failure in running a business. This study sought to establish the influence of financial literacy training on self-employment among the youths in Thika Town constituency by investigating the extent to which source of capital, creation of new ventures, access to markets training as well as financial management behavior have contributed to self-employment. To achieve the objectives, the study adopted a descriptive survey design. The study targeted 432 youth entrepreneurs who have received financial literacy training by Mercy Corp International (Mercy Corp International 2013). The study used simple random sampling technique to select a study sample. Data was collected using questionnaires and an interview guide. The researcher administered the questionnaire through a drop and pick later method. Further, the researcher personally administered the interview guides to the interviewees. The data collected was then analyzed using descriptive statistics. The study concludes that financial literacy training programmes had a positive impact towards youth’s engagement in self employment activities. The study found out that new venture creation training, financial management training, venture capital financing training and training on access to market were very important among the young people entering in the field of entrepreneurship and those who were already in business. The study established that through these training, youths are able to develop and articulate their business ideas, identify areas that have not been adequately ventured into, give their financial statement, and develop confidence of marketing their products and services among others. From these findings, the researcher hoped that the new and the existing entrepreneur would be able to generate more business opportunities and enact them in ways that expand their own capabilities, thus remaining competitive in the field of entrepreneurship. It is therefore recommended that government and other stakeholder should ensure that youth financial literacy programs are carried out on ongoing basis to ensure that the youths are able to start business, develop new products and expand their businesses; this would go a long way in ensuring financial independence of the youths.