Does Entrepreneurs Behavioral Disposition Affect the Level of Financial Inclusion?

Abstract

The main purpose of this study was to examine effects of the three behavioral dispositions/factors (self-control, confidence and social proof) on financial inclusion (FI). The study was grounded on the behavioral finance theories. Cross-sectional survey design was adopted with a target population for the study was the 2,194 licensed ME in Embakasi East Constituency of Nairobi County. Stratified random sampling technique was used to select a sample size of 486 respondents. Primary data was collected using a structured questionnaire. Data was analyzed using descriptive and inferential statistics. Findings indicated significant positive effects of the three behavioral dispositions; self-control (SC) (β = .265, ρ=.000), Confidence (C) (β = .241, ρ=.000) and Social proof (SP) (β = .212, ρ=.000) on financial inclusion. The study contributes to the development of finance theory through establishment of relationship between the three behavioral factors and FI. The main contribution of the study was on establishing the pivotal role of behavioral on usage of financial services, with positive disposition being empirically determined to be an enabler of FI. In addition, policy recommendations and areas for further study by finance scholars have been suggested.