EFFECTS OF FINANCIAL LITERACY ON THE FINANCIAL PERFORMANCE OF ARTISANAL FISH TRADERS IN MARINE FISHERIES: A CASE OF KILIFI COUNTY

Abstract

Over the years the financial performance of SME has been viewed from financial, strategic and structural development dimensions. Financial performance is a critical factor in the SME success and sustainability despite the myriad of challenges they face globally. Kilifi County experiences the problem of SME failure and the study intended to fill the gap on the perceived level of financial information of marine artisanal fish traders in terms of financial behavior, knowledge and perceived attitude, and determine its effect on the financial performance of the artisanal fish traders SMEs in the context of Kilifi County. The specific objectives were to assess the effect of financial knowledge, behavior and financial attitudes on the financial performance of artisanal fish traders. This study was guided by the Financial Literacy Theory, Modern Portfolio Theory and the Decision Theories. Descriptive design was used and a sample population of 81 derived from a population frame of 422 fish traders belonging to beach management units in Kilifi County. Primary data was collected using the structured questionnaire and ethical clearance was obtained from Pwani University. Data was analyzed using the SPSS version 25. The study results were presented in form of tables and graphs. Pierson’s correlation and Regression analysis were used to determine the relationship of the variables and the statistically significance of the association between the variables. The findings of the study showed that behavior correlated positively while knowledge and attitudes correlated negatively to financial performance. The findings, although all the study variables financial knowledge, attitude and behavior conclusively can be used as predictors of the model they did not all correlate positively. Regression analysis too reflected a weak relationship with the dependent variable of only up to 36.4% while 63.6% of the change could not be predicted. The study findings therefore suggest that there are other factors that affect the financial performance of the artisanal fish traders in marine fisheries of Kilifi county other than the variables investigated in this study. The study therefore recommends further research to be carried out to find out the variables hat affect the financial performance and general sustainability of fishing SMEs to fill in the gap.