The Relationship Between the Financial Literacy of the Proprietors and Enterprise Performance of Retail Businesses in Kutus Town, Kenya

According to the Economic Survey report of 2023, approximately 83% of Kenyans are literate. This was supported by the preliminary survey conducted in Kutus, which showed that the majority of retail business owners were relatively literate. This study sought to establish the nexus between proprietor financial literacy and enterprise performance of retail businesses in Kutus town. The research was conducted in Kutus, Kirinyaga County, which has numerous retail outlets that pervaded different sectors. Specifically, the study sought to assess whether financial knowledge, financial competence, and financial experience possessed by retail business owners influence business performance. The study was anchored on the financial socialization theory. The study, whose target population comprised the retail businesses operating within Kutus town, adopted the descriptive research design. The study sampled 135 retail businesses using a systematic sampling technique. The study used primary data collected using structured questionnaires. Analysis of the collected data was performed using descriptive and inferential statistical techniques, and results were presented in tables and charts. The study found that all three constructs of the financial literacy variable had a positive and significant influence on the performance of retail outlets. The study, therefore, recommended that proprietors of business entities should retool their financial literacy skills in an effort to improve their entrepreneurial decisions. Further, Institutions of higher learning should develop and launch training programs tailor-made for entrepreneurs to plug the identified financial literacy gap. JEL: L10; L20; M10; G20 Article visualizations: