Volume 5, Issue 1, February 2016, Page: 10-18
Effects of Financial Literacy on Individual Choices Among Financial Access Strands in Kenya
Adan Guyo Shibia, Kenya Institute for Public Policy Research and Analysis, Nairobi, Kenya
Joseph Kieyah, Kenya Institute for Public Policy Research and Analysis, Nairobi, Kenya
Received: Feb. 11, 2016;       Accepted: Feb. 21, 2016;       Published: Mar. 4, 2016
DOI: 10.11648/j.ijber.20160501.12      View  5224      Downloads  287
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.
Financial Access, Literacy, Probit, Sub-saharan Africa, Kenya
To cite this article
Adan Guyo Shibia, Joseph Kieyah, Effects of Financial Literacy on Individual Choices Among Financial Access Strands in Kenya, International Journal of Business and Economics Research. Vol. 5, No. 1, 2016, pp. 10-18. doi: 10.11648/j.ijber.20160501.12
Copyright © 2016 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License ( which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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