Financial management skills and utilization of women enterprise funds in Nakuru East Sub-County, Kenya

Abstract

Despite the availability of the Women's Enterprise Development Funds, the funds go unutilized. The low utilization of funds has been associated with poor financial management skills. This is evidenced by the low uptake and poor utilization of the women’s enterprise development funds, with only 28% of women's enterprises, actually getting the funds, therefore, the study sought to determine the relationship between financial management skills and utilization of women enterprise development funds among women groups in Nakuru East sub-county, Kenya. Particularly, the study sought to determine the effect of budgeting skills, financial record management skills, saving skills and loan management skills on utilization of women enterprise development funds among women groups in Nakuru East Sub-County, Kenya. The research was directed by stewardship theory, agency theory and information asymmetry theory. The study was conducted using a descriptive research approach. The target population was group officials (chairperson, treasurer, and group secretary) from 321 women's groups in Nakuru Town East Constituency. Therefore, the total target population was 963 group officials. Nassiuma's formula was used to calculate a sample size of 91 respondents. The sample size for each of the five wards was determined using stratified random sampling. Self-administered semi-structured questionnaires were used to obtain primary data. Cronbach's Alpha was used to assess instrument reliability, and content validity was established through expert review of the questionnaire. Descriptive and inferential statistics were used to analyze the data. In order to evaluate the data, SPSS version 26 was utilized. Frequency distribution tables were used to display the study's findings. A positive and statistically significant correlation between the ability to keep financial records and the utilization of funds by women was discovered by the inquiry. Women who were able to effectively maintain their financial records were more likely to make use of the funds available to them, according to the study. A considerable favourable correlation between women's fund uses and their ability to handle debt was identified in the study. Furthermore, the study found that the utilization of women's funds is strongly correlated with loan management skills. From the conclusion, the study recommended that they should invest in training and capacity-building programs focused on budgeting, financial record management, saving, and loan management skills. In addition, the researcher recommended that they should offer tailored financial literacy and training programs specifically designed for women borrowers, addressing their unique needs and challenges. To the government and policymakers, the study recommended that they should create an enabling policy environment that supports women's economic empowerment and access to financial resources, including targeted initiatives, incentives, and regulatory reforms.