This paper investigates effects of financial literacy on individual choices among formal financial services, informal financial services, and complete financial exclusion in Kenya. The study employed cross-sectional analysis using FinAccess national surveys 2009 and 2013 for 6,598 and 6,449 individuals, respectively. Multinomial probit regressions show that financial literacy is a strong predictor of individual demand for financial services. Financial literacy scores increases with increasing level of formality and average performance on financial literacy tests is generally lower than those reported in extant studies for developed countries. The findings suggest importance of policy efforts to promote financial literacy to expand individual access to formal financial services. To our knowledge this is the first paper in developing countries context to use both objective and self-reported measures of financial literacy and its role in individual choices among different financial access strands.
| Published in | International Journal of Business and Economics Research (Volume 5, Issue 1) |
| DOI | 10.11648/j.ijber.20160501.12 |
| Page(s) | 10-18 |
| Creative Commons |
This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited. |
| Copyright |
Copyright © The Author(s), 2016. Published by Science Publishing Group |
Financial Access, Literacy, Probit, Sub-saharan Africa, Kenya
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APA Style
Adan Guyo Shibia, Joseph Kieyah. (2016). Effects of Financial Literacy on Individual Choices Among Financial Access Strands in Kenya. International Journal of Business and Economics Research, 5(1), 10-18. https://doi.org/10.11648/j.ijber.20160501.12
ACS Style
Adan Guyo Shibia; Joseph Kieyah. Effects of Financial Literacy on Individual Choices Among Financial Access Strands in Kenya. Int. J. Bus. Econ. Res. 2016, 5(1), 10-18. doi: 10.11648/j.ijber.20160501.12
AMA Style
Adan Guyo Shibia, Joseph Kieyah. Effects of Financial Literacy on Individual Choices Among Financial Access Strands in Kenya. Int J Bus Econ Res. 2016;5(1):10-18. doi: 10.11648/j.ijber.20160501.12
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Download@article{10.11648/j.ijber.20160501.12,
author = {Adan Guyo Shibia and Joseph Kieyah},
title = {Effects of Financial Literacy on Individual Choices Among Financial Access Strands in Kenya},
journal = {International Journal of Business and Economics Research},
volume = {5},
number = {1},
pages = {10-18},
doi = {10.11648/j.ijber.20160501.12},
url = {https://doi.org/10.11648/j.ijber.20160501.12},
eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20160501.12},
abstract = {This paper investigates effects of financial literacy on individual choices among formal financial services, informal financial services, and complete financial exclusion in Kenya. The study employed cross-sectional analysis using FinAccess national surveys 2009 and 2013 for 6,598 and 6,449 individuals, respectively. Multinomial probit regressions show that financial literacy is a strong predictor of individual demand for financial services. Financial literacy scores increases with increasing level of formality and average performance on financial literacy tests is generally lower than those reported in extant studies for developed countries. The findings suggest importance of policy efforts to promote financial literacy to expand individual access to formal financial services. To our knowledge this is the first paper in developing countries context to use both objective and self-reported measures of financial literacy and its role in individual choices among different financial access strands.},
year = {2016}
}
TY - JOUR T1 - Effects of Financial Literacy on Individual Choices Among Financial Access Strands in Kenya AU - Adan Guyo Shibia AU - Joseph Kieyah Y1 - 2016/03/04 PY - 2016 N1 - https://doi.org/10.11648/j.ijber.20160501.12 DO - 10.11648/j.ijber.20160501.12 T2 - International Journal of Business and Economics Research JF - International Journal of Business and Economics Research JO - International Journal of Business and Economics Research SP - 10 EP - 18 PB - Science Publishing Group SN - 2328-756X UR - https://doi.org/10.11648/j.ijber.20160501.12 AB - This paper investigates effects of financial literacy on individual choices among formal financial services, informal financial services, and complete financial exclusion in Kenya. The study employed cross-sectional analysis using FinAccess national surveys 2009 and 2013 for 6,598 and 6,449 individuals, respectively. Multinomial probit regressions show that financial literacy is a strong predictor of individual demand for financial services. Financial literacy scores increases with increasing level of formality and average performance on financial literacy tests is generally lower than those reported in extant studies for developed countries. The findings suggest importance of policy efforts to promote financial literacy to expand individual access to formal financial services. To our knowledge this is the first paper in developing countries context to use both objective and self-reported measures of financial literacy and its role in individual choices among different financial access strands. VL - 5 IS - 1 ER -
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