An Assessment of Financial Literacy and the Performance of UWEZO Funded SME’s in Kirinyaga County, Kenya

Agnes Ndinda Mutiso, Robert Gitau Muigai


The study sought to assess the financial literacy and performance of Uwezo funded SMEs in Kirinyaga County. Lack of finance has been attributed to be the cause of poor performance of SMEs necessitating the government of Kenya to initiate programs such as UWEZO fund to provide the much needed finances for the success of these SMEs. Among the Kenya government initiatives is the financial literacy training program that is provided to the UWEZO fund beneficiaries as a prerequisite for getting the funds. Guided by financial literacy theory the study surveyed the level of financial literacy among 88 uwezo funded SMEs who were randomly selected and assessed the effect of the financial literacy on the performance of the SMEs. The findings of the study reveal that there is a significant positive relationship between financial literacy and the performance of the sampled SMEs. It was established that the SME owners had good financial literacy skills in terms of personal savings, record keeping, credit management and budgeting but had difficulties in implementing these skills in their day to today business decisions. The study therefore recommends that the providers of the financial literacy training programs should have a review program to ensure that the SMEs are able to apply the skills acquired to be able to make better business decisions. The study also recommends that a similar study can be conducted on the same SMEs to identify the cause of the knowledge gap.

Key words: Financial literacy, personal savings, record keeping, credit management

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