IMPACT OF FINANCIAL INCLUSION ON WELFARE OF PERSONS LIVING WITH DISABILITY IN KENYA
Abstract
Financial services are difficult for people with impairments to obtain in both developed and developing countries. This is because they are not seen as a sizable consumer base by banks and other financial institutions. More than 60% of persons with disability in Kenya are impoverished. The Kenyan government has started a number of programs to help persons with disabilities with their financial circumstances. A cash transfer scheme that encourages the use of assistive equipment is one of these. Additionally, there are subsidies and grants available to assist with the costs of schooling. But raising awareness of these advantages is still difficult, particularly in rural regions. Despite these measures there is still a challenge of financial inclusion especially among the mainstream financial institutions. A large number of disabled individuals in Kenya are presently left out in terms of financial access from mainstream financial institutions like banks because the target audience is restricted to those who have severe disabilities. Despite efforts to implement disability laws, there are still issues with financial inclusion for persons with disabilities in Kenya. This study aimed to investigate the financial inclusion and welfare of households with disabled individuals in Kenya. The specific objectives were to determine the impact of financial inclusion on the welfare of persons with disabilities, to assess the effect of household expenditure on their welfare, and to evaluate the effect of education empowerment on their welfare. The study was based on financial growth theory, inclusion theory, consumer behavior theory, and vulnerability group theory. An explanatory research design was used to clarify the relationship between variables, and the study relied on secondary data from the Kenya National Bureau of Statistics, the 2019 Census report, the Kenya Integrated Household Budget Survey, and Financial Access surveys. Descriptive and inferential statistics were performed to determine the impact of financial inclusion on the household welfare of individuals with disabilities residing in Kenya. The data set was found to be suitable for analysis after diagnostic tests such as residual autocorrelation, heteroscedasticity of the error term, normality, and multicollinearity were performed. Based on the study's findings, it was determined that the coefficient of determination (R2) was 0.791 while the adjusted R2 was 0.759. From the finding, it can be concluded that; financial inclusion, household expenditure and education empowerment explains 75.9 percent of the changes in the welfare of persons with disabilities. The results show that persons with disabilities' welfare increases significantly (r=0.0520, p<.05) with each unit increase in financial inclusion. According to the findings, a unit increase in household expenditure increases persons with disabilities’ welfare in a nonsignificant way (r=0.011, p>.05). Lastly, the study's results show that persons with disabilities' wellbeing significantly increases with each unit rise in education empowerment (r=0.0280, p<.05).
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