Financial literacy and entrepreneurial sustainability of women investment groups in Nairobi, Kenya

Abstract

Though entrepreneurial sustainability of women investment groups and businesses is integral to economic sustainability they are severely faced by a number of challenges in the quest of seeking entrepreneurial sustainability. This was quite evident during the COVID-19 pandemic where three in five businesses owned by women collapsed or downsized; resulting to job losses, and difficulties in accessing financing. This had a cascading effect on their sustainability, raising questions on the general sustainability of women investment groups and businesses. The most recurring problem that surfaced is that there exist substantial financial literacy gaps among these women groups that predispose them to financial challenges. It is on this premise that this study aimed to assess how financial literacy influence entrepreneurial sustainability of women investment groups in Nairobi. The study was anchored on human capital theory and employed descriptive research design. It targeted chairpersons drawn from 17000 groups; out of which a sample of 284 was used. The primary data was collected using semi-structured questionnaires that were self-administered. The results indicated that financial literacy had a strong positive influence on entrepreneurial sustainability of women investment groups. This powerful association emphasized the essential role played by financial literacy in empowering the women with fundamentals of financial management knowledge and skills that enable them to make sound financial and investment decision that bolsters not only growth but also entrepreneurial sustainability of their investment activities and businesses. In the light of this, the study recommended prioritization of financial education and literacy programs by all women investment groups; as well as customer-tailoring them to fulfill the diverse needs of each group. Additionally, it recommends that there should equity in access to financial education among women of all backgrounds. Equally, there should be increased collaboration and partnership between micro-financial institutions and women investment groups to promote access to credit, investment opportunities and other financial services; as well as development of policies that encourage financial inclusion.