THE MODERATING EFFECT OF FINANCIAL LITERACY ON THE RELATIONSHIP BETWEEN WOMEN ENTERPRISE FUND UTILIZATION AND PROFITABILITY OF THE WOMEN-OWNED ENTERPRISES IN KAJIADO COUNTY, KENYA
Abstract
Women-owned enterprises globally face persistent profitability challenges despite receiving financial support from government programs. This study investigated the moderating effect of financial literacy on the relationship between Women Enterprise Fund utilization and profitability of women-owned enterprises in Kajiado County, Kenya. Anchored on Financial Literacy Theory, the study adopted an explanatory research design with 381 respondents selected through stratified random sampling, achieving a 72.4% response rate. Data were analyzed using descriptive statistics, correlation analysis, and Hayes' Process Macro Model 1. Results revealed strong positive correlations between loan amount utilization (r = 0.899), repayment period (r = 0.898), savings (r = 0.930), and profitability. The moderated model explained 90.21% of profitability variance compared to 87.93% baseline. Financial literacy significantly strengthened the effects of loan amount (β = 0.493, p = 0.023) and savings (β = 0.587, p = 0.002) on profitability. The study concludes that financial literacy is a critical moderating variable determining the effectiveness of government financial interventions in promoting sustainable enterprise profitability. The study recommends that policymakers integrate comprehensive financial literacy training programs into fund disbursement processes, establish quarterly literacy campaigns through local forums, and develop mobile-based learning platforms to enhance women entrepreneurs' financial competencies in marginalized regions.
Keywords: Financial Literacy, Women Enterprise Fund, Profitability, Women-Owned Enterprises, Kajiado County
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