Assessment of savings and Asset allocation behaviour on low income individuals in Rural Kenya: Case of Oyani Sub Location, Kenya.

Abstract

The goal of the government of Kenya as is spelled out in Vision 2030 is to stimulate the rate of annual growth to over 10% every year till the year 2030, this kind of growth will enable the country to transform into a middle-income economy. Thus, the purpose of the study was to find out the factors that influence saving behaviours and asset allocation among low income households in rural areas Kenya: A case of Oyani Sub Location, Kenya. The objectives of the study were to: examine the relationship between financial literacy and saving behaviours and asset allocation decision in rural Kenya: A case of Oyani Sub Location, Kenya; identify the how financial institutions’ characteristics influences saving behavior and asset allocation in rural Kenya: A case of Oyani Sub Location, Kenya; evaluate how fiscal policy influences saving and asset allocation in rural Kenya: A case of Oyani Sub Location, Kenya and establish if there is a relationship between household head’s demographic information and saving and asset allocation in rural Kenya: A case of Oyani Sub Location, Kenya. The information that provided by this research will benefit policymakers, community members and academicians. It adopted a in the case study research design with a target population of 3569 households in the rural areas of Oyani. The sample size was 351 heads of the household. The researcher adopted stratified random sampling technique and collected data using questionnaires. The instruments were validated by the supervisors. Reliability of the instruments were determined through a pilot study where Cronbach alpha coefficients of 0.7 was considered appropriate. Quantitative data was analyzed using descriptive and inferential statistics, thereafter, presented in tables. The study revealed that financial literacy (t =4.277, P<.05), financial institutions’ characteristics (t =6.130, P<.05), fiscal policy (t =2.854, P<.05) and household’s head’s demographic information (t =7.489, P<.05) significantly affect saving behaviours and asset allocation among low income households in rural areas Kenya: A case of Oyani Sub Location, Kenya. Besides, these results imply that household head’s demographic information is most (t =7.489, P<.05) important predictor for savings behaviour and asset allocation decision. The study recommends that the government and other financial service providers to focus more on the issue of saving and asset allocation decisions for low income households in rural areas. In particular, they should train low income households in rural areas.

Key Words: Savings and Asset allocation behaviour, Low income individuals in rural Kenya, Oyani Sub Location Kenya.

DOI: 10.7176/PPAR/9-2-09