Effect of Financial Capability on Investment Among Financially Included Youth: Case of Nyeri and Kirinyaga Counties, Kenya.

Abstract

Financial inclusion has been found to play a critical role in poverty and unemployment reduction through household investments. This has seen countries put concerted efforts towards enhancing financial inclusion with the main objective of reducing poverty and unemployment. Kenya has also put efforts and has seen notable levels of increase of financial inclusion. Majority of the citizens can now access wide range of financial services. Contrary to high levels of financial inclusion in Kenya, unemployment and poverty levels are still high in Kenya and more pronounced among the youth. The purpose of this study was to establish whether financial capability has any effects on investment among financial included youth in Kenya. Specifically, the study was to establish whether financial products awareness, financial concepts understanding, financial management skills and financial discipline affects investment among financially included youths in Kenya. The study population was Kenyan youth aged between 18 to 35 years from Kirinyaga and Nyeri Counties. A logistic regression analysis was conducted to predict undertaking investments using financial products awareness, financial concepts understanding, financial management skills and financial discipline as predictors. The Wald criterion demonstrated that financial concepts understanding, financial management skills and financial discipline made a significant contribution to prediction. Financial products awareness was not a significant predictor. As a way of enhancing investment and ensuring financial inclusion achieves its objective, this study recommends enhancement of financial capability among the youth.