Abstract:
Many people join SACCOs with a goal of saving and benefiting from SACCOs products such as:
easy access to credit, dividends that may be received in favorable circumstances, plan for
retirement, ease arrangement for housing or land purchase among others However, this goal is
often not met or is partially met due to lack of financial literacy. Therefore, current study sought
to examine the effect of financial literacy on investment decision among SACCO members in
Nairobi County. Specifically, the study sought to examine the effect of financial knowledge,
financial behavior, financial attitude and financial awareness on investment decision amongst
SACCO members drawn from five SACCOs selected purposively in Nairobi County. The study
was guided by the dual process, theory of planned behavior, social learning theory and expected
utility theory. Purposive sampling was used to select the five SACCOS in Nairobi from which
385 members were drawn through stratified random sampling. Primary data was collected
through the use of questionnaires. Regression analysis was carried out to show the nature of the
relationship between independent and dependent variables. Results of the study revealed that
there was a positive and significant relationship between financial knowledge, financial attitude
and investment decision while both financial behaviour and financial awareness had positive and
non-significant relationship with investment behavior. SACCO should continuously sensitize
members on how to improve their financial management skills and attitude as such to foster their
investment decision. Although, financial behavior and awareness had positive and insignificant
relationship there is need of sensitization sessions to improve financial behaviour and adopt
customized financial awareness sessions.