Effect of Diversification on Uptake of Pension in Uasin Gishu County, Kenya

Abstract

Pension schemes have gained popularity globally, leading to exponential growth and establishment in developed countries. Nevertheless, the uptake of pension products is marked by a lack of appropriate investment vehicles, limited market liquidity knowledge, and poor expertise about these investments and their associated risks. Therefore, the purpose of the study was to investigate the effect of diversification on the uptake of Pensions in Uasin Gishu County. This was because there was a relatively low uptake of pensions in the region. The study employed an ex-post-facto research design. The target population of the study was 159 employees working in the Pension Institutions in Uasin Gishu County, Kenya. A simple random sampling technique was employed to select a sample of 114 employees from all the pension institutions in Uasin Gishu County. A questionnaire was adopted as the data collection instrument. Data collected were analyzed by using descriptive and inferential statistics. Multiple Regression Analysis was employed to test the hypotheses. The study established a positive relationship between diversification (p=0.000) with a contribution of 63.5% and uptake of pension products. The study commended that the Pension Institutions in Uasin Gishu County should devise products that fit the informal sector as a way of promoting the uptake of Pension Institutions in Uasin Gishu County. The study also commented that the pension institution should diversify their products to include more affordable products such as daily submission of savings via mobile phones.