Financial literacy of customers and the performance of financial institutions:

Abstract

This study analysed the effect of financial literacy of customers and the performance of financial institutions. The study was conducted under three objectives which sought to establish the relationship between budgeting knowledge of customers and the performance of financial institutions, the effect of investment knowledge of customers on the performance of financial institution, and how savings knowledge of customers affects financial institutions’ performance. Centenary bank was chosen and used as a case study,a quantitative analysis on a sample of 36 respondents which was selected using a simple random sampling method was carried out.Data was mainly obtained by the use of questionnaires and data was analysed quantitatively. All the data was analysed by the use of statistical package for social scientists 17.o (SPSS) programme and was interpreted by composing explanations and substantiating them using the respondents open responses. The study found out that there is a relationship between financial literacy of customers and the performance of financial institutions. Similarly it was established that there is a relationship between budgeting knowledge of customers and the performance of financial institutions. it was also found out there is a relationship between investment knowledge of customers and the performance of financial institutions and also a relation between the savings knowledge and the performance of financial institutions was revealed, therefore the study concluded that the financial literacy of customers positively influence the performance of financial institutions. Financial literacy along with its aspects it covers like budgeting knowledge, saving knowledge, investment knowledge greatly dictate customers efficient utilisation of funds something which impacts on the performance of the financiers.Financial institutions should strongly emphasize the issue of keeping their customers financially literate