Financial Literacy, Financial Behavior, Performance of Women Owned Enterprise in Rural Areas, Kenya

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John K. Tarus
Thomas K. Tarus


Financial Literacy, Performance, Women Owned Enterprise, Financial Behavior


The purpose of this study was to determine the mediating effect of financial behaviour on the relationship between financial literacy and the performance of the womenowned enterprise in Rural Areas in Kenya. The study sampled 219 respondents from a target population of 488 women-owned enterprises in Nandi County. Data was collected using a 5-likert questionnaire and analyzed using Hayes Model 4. Results showed that investment and budgeting literacy significantly affected the performance of women-owned enterprises. Financial behaviour partially mediated the relationship between investment literacy and the performance of women-owned enterprises. The relationship between budgeting literacy and the performance of enterprises was also partially mediated by the financial behaviour of women entrepreneurs. The study concludes that women entrepreneurs with investment and budgeting literacy are likely to increase their business performance. Further, women with good financial behaviour are expected to employ the acquired investment and budgeting skills to improve business performance. The study recommends more emphasis on training women entrepreneurs in investments and budgeting. The study provides new insight into the link between financial literacy and the performance of women-owned enterprises via financial behaviour.

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