Financial Attitude and Financial Literacy in Relation to Financial Management Behaviour among Youth Owned Enterprises in Nairobi Central Business District Kenya

Authors

  • Cornelius Kipkemei Kurere
    Lecturer, School of Business and Economics; Department of Accounting and Finance, Kisii University, Kenya.

Abstract

Purpose: Financial management behaviour is essential for organising business resources, meeting payment obligations and preparing for future financial needs. This study examined the relationship between financial attitude and financial management behaviour and the moderating role of financial literacy among youth-owned enterprises in Nairobi Central Business District, Kenya.


Methodology: Guided by the Theory of Planned Behaviour and the Behavioural Life Cycle perspective, the study adopted a descriptive cross-sectional survey design. The sampling plan targeted 185 enterprises from a provisional population of 344 using Yamane’s formula at a 5% margin of error, with simple random selection of enterprises and purposive identification of owners or managers responsible for financial decisions. Structured questionnaires provided 106 usable responses, measuring financial attitude, self-reported financial literacy and enterprise financial management practices. Data were analyzed using descriptive statistics, Pearson correlation and hierarchical multiple regression.


Findings: Financial attitude had a negative and statistically significant association with financial management behaviour. The financial attitude–financial literacy interaction was positive and statistically significant. The positive interaction indicated that the attitude–behaviour relationship became more positive as financial literacy increased.


Conclusion: The study concluded that financial attitudes should be interpreted alongside financial understanding when explaining enterprise financial practices.


Value: It recommends that the State Department for Micro, Small and Medium Enterprises (MSME) Development integrate practical financial education, mentoring and regular assessment of financial management practices into youth enterprise-support programmes.