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Joyce Kinyanjui University of Zululand

BUSINESS INFORMATION COMPETENCES WITH REFERENCE TO INFORMATION LITERACY AMONGST WOMEN ENTREPRENEURS IN KENYA AND SOUTH AFRICA: A VALUE-ADDED PRODUCT FOR ECONOMIC EMPOWERMENT. Joyce Kinyanjui University of Zululand. 1. INTRODUCTION AND CONCEPTUAL SETTING.

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Joyce Kinyanjui University of Zululand

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  1. BUSINESS INFORMATION COMPETENCES WITH REFERENCE TO INFORMATION LITERACY AMONGST WOMEN ENTREPRENEURS IN KENYA AND SOUTH AFRICA: A VALUE-ADDED PRODUCT FOR ECONOMIC EMPOWERMENT. Joyce Kinyanjui University of Zululand

  2. 1. INTRODUCTION AND CONCEPTUAL SETTING • To participate fully in the affairs of the modern society and also realize ones personal goals, utilization of information is mandatory. • Anybody in this development-oriented Information Society, can create, access, utilize and share information and knowledge, enabling individuals, communities and peoples to achieve their full potential in promoting their sustainable development and improving their quality of life (WSIS, 2005 p.9).

  3. 1. INTRODUCTION AND CONCEPTUAL SETTING • As people share, evaluate and use information, it spurs growth and development. Information has therefore become big business and is the engine that is driving the modern society ( Bhandary, 2000). • The most recent revolution in human civilization is information revolution. It is the driving force behind development in all spheres of life. This is why the present society is referred to as an Information society.

  4. 1. INTRODUCTION AND CONCEPTUAL SETTING • One of the tenets of this Information Society is enshrined in the Universal Declaration of Human Rights Article 19 “that everyone has the right to freedom of opinion and expression; that this right includes freedom to hold opinions without interference and to seek, receive and impart information and ideas through any media and regardless of frontiers.” (WSIS, 2005 p.9) It is this right that has made communication so central to the Information Society and the foundation of all social organization.

  5. 1. INTRODUCTION AND CONCEPTUAL SETTING • As communication occurs, a lot of information is created and circulated causing it to grow exponentially. This has led to the problem of information overload. For effective utilization of information then a special kind of literacy beyond functional literacy is required.This kind of literacy is what is commonly referred to as Information Literacy (IL).

  6. 1. INTRODUCTION AND CONCEPTUAL SETTING • According to the Association of College and Research Libraries, ( 2000 ) Information literacy (IL) is defined as an intellectual framework for understanding, finding, evaluating and using information. The key words from this definition are; “determine, access, evaluate, incorporate, use and understand.” (ACRL: 2000) • In recognizing the importance of Information Literacy, the Alexandria Proclamation on Information Literacy and Lifelong Learning held at the Bibliotheca Alexandrina on 6th -9th Nov 2005 stated that ‘Information literacy and lifelong learning are the beacons of the information society, illuminating the courses to development, prosperity and freedom.’ (Parker: 2006).

  7. 1. INTRODUCTION AND CONCEPTUAL SETTING • There are different types of literacies e.g functional or basic literacy, cultural, computer, and business, financial literacy • Business Literacy (BL) -be able to understand all the dynamics of business like finance, sourcing of products, good customer care, quality control, competition, advertising, book-keeping, budgeting, credit control, profit margins, and many other skills. • Of these, one of the most important skills and which forms the centre of this study is Financial Literacy (FL).

  8. 1. INTRODUCTION AND CONCEPTUAL SETTING • Before one can be said to be financial literate, it is assumed that this person has the intellectual framework for understanding, finding, evaluating and using information relating to finances, financial products, risks and any other information related to his financial well-being.(Lusardi and Mitchell: 2007) The key words for defining IL as used by ACRL become mandatory here. • “determine, access, evaluate, incorporate, use and understand.” (ACRL: 2000)

  9. 1. INTRODUCTION AND CONCEPTUAL SETTING • In this study, FL will be viewed as a value-added product to all the initiatives and strategies put in place for the economic empowerment of women. In general, adding value to a product means changing or transforming the product from its original state to a more valuable state.

  10. 1.2 contextual setting • Different countries have different strategies to meet MDGs Kenya has developed a strategy referred to as ‘Visions 2030.’ under the National Economic and Social Council of Kenya. (NESC 2006) • Level of literacy. Some of the initiatives include: introduction of free primary education in 2002, scrapping of boarding fees in secondary schools in 2008 and increasing university enrollment by 50%.

  11. 1.2 contextual setting • Gender equality and economic empowerment of women. The Kenyan Government is addressing this issue through • the Economic Recovery Strategy (ERS) and the Ministry of Gender, Sports, Culture and Social Services (MGSCS). • Women Enterprise and Development Fund (2006) with one billion Kenya shilling for disbursement to women entrepreneurs

  12. 1.2 contextual setting • Private sector • Equity Bank- 5 billion Kenya shillings; • Kenya Commercial Bank has another 5 billion shillings. • The International Finance Corporation (IFC) • Standard Chartered Bank has the Diva account, • Equity Bank with it’s slogan “Empowering women in business” has several accounts; Shaba, Imara, Fedha, Dhahabu, Almasi and Platini. • Unofficial women’s groups popularly known as ‘chama’ are even being invited by mainstream banks to do business with them.

  13. 1.2 contextual setting • In South Africa, -Women’s Fund in 2006, the Women Empowerment Programme (WEP), • Strategic Framework on Gender and Women Economic Empowerment. • In an address on the State of the Nation in 2008 to a Joint Sitting of Parliament at Cape Town, President Thambo Mbeki said that his government is ‘intensifying efforts already started to scale up assistance to co-operatives and small enterprises especially those involving women, with emphasis on providing training and markets, including linking them up with established outlets’ (GoSA:2008).

  14. 1.2 contextual setting • However the most pertinent question is whether the intended recipients have the basic skills in management of finances. Both the Government and private sector have grand initiatives for empowering women economically but FL will determine how much of these billions available to the women will actually transform and empower their lives

  15. 1.3 Statement of the problem • Lusardi and Mitchell (2007 p.39) have clearly established that there is a very high relationship between FL and economic outcomes. Women who are not financially literate are excluded from fair and safe financial services from the mainstream providers like banks. It is no wonder then that in the recent ‘Ponzi’ schemes popularly called pyramid schemes where Kenyans were conned out of billions of shillings, women made up the majority. For as long as this exclusion remains economic empowerment of women will never happen and the term will remain just a catchy phrase.

  16. 1.3 Statement of the problem • However before we can talk of FL we have to look at where the two countries are with regard to basic literacy which is a precursor to IL and FL. Despite various efforts to raise the literacy level in both countries they still remain unacceptably low with the majority of illiterate people being women.(GoK and UN: 2003). The Kenyan Government while admitting the seriousness of this problem said “education and training in Kenya today is facing various challenges that have negatively impacted on the economic development. Unless addressed immediately, these challenges are likely to affect unfavorably the current and future development in Kenya.” (MOEST: 2004)

  17. 1.3 Statement of the problem • Part of the solution to this problem is Adult Literacy Programmes. The enrolment in 2001 was only 93,052. (MOEST: 2004) • Part of the Kenyan Government’s initiatives for lifelong learning was the establishment of Technical, Industrial, Vocational and Entrepreneurship Training (TIVET) Institutions. However they are faced with myriads of problems. They have inadequate and obsolete teaching and learning facilities and equipments. The teachers are poorly trained and teaching a curriculum that is not rationalized with the needs of the country. Quality assurance, inspection and supervision are extremely weak. (MOEST: 2004)

  18. 1.3 Statement of the problem • Despite the fact that we are in the information age, Kenya has no National Information Policy Bill to make information more accessible. It was only in the year 2007 that it was drafted by the Ministry of Information and Communication. (MIC: 2007)

  19. 1.3 Statement of the problem • In SA- programmes for enhancing literacy among the adults. For example there is Banking on Our Future (BOOF) South Africa which is an innovative financial information literacy whose sole mandate is to provide a foundation for understanding money. Their target is to train 5,000 young people in financial literacy, dignity and entrepreneurship and by the year 2012 the number is hoped to increase to 50,000 young people. (BuaNews (Tshwane): 2008) This initiative and many others that have not been mentioned here are noble but if we compare with the literacy figures they are just but a drop in the ocean.

  20. 1.3 Statement of the problem • There are some success stories of libraries in SA with very innovative IL programmes. However the majority of citizens do not have access to any form of library and information services. (Underwood: 2002) • In Kenya the Kenya National Library Service is lobbying Members of Parliament to use part of their Constituency Development Fund to form Community Libraries but in the last parliament only two out of 210 constituencies established a community resource center.

  21. 1.3 Statement of the problem • A number of surveys mainly in the West and parts of Asia have been carried out to find out various aspects of literacy among different segments of their population. For example in Canada an Information Literacy survey was carried out in 2003. (GoC: 2003) Singapore carried out its first National Survey in 2005 (GoS 2005). According to the researcher no survey has been carried out in these two countries to find out the level of FL among women entrepreneurs and yet this could be the missing link between women economic empowerment initiatives and actualization of the same.

  22. 1.4 Aim of the study • The main aim of the study is to find out the level of financial literacy among women entrepreneurs in Kenya and South Africa and suggest possible solutions.

  23. 1.5 Objectives of the study • To determine the level of financial literacy among women entrepreneurs in Kenya and South Africa. • To determine the sources of funding for the businesses owned by women entrepreneurs in Kenya and South Africa • To find out how accessible main stream financial services are to the women entrepreneurs in Kenya and South Africa. • Determine the challenges that the entrepreneurs face in accessing financial information in Kenya and South Africa • Suggest a model for enhancement of financial literacy skills for the women entrepreneurs in Kenya and South Africa.

  24. 1.6 Research questions • The following research questions will be addressed in order to realize the objectives of the study. • Does the entrepreneur budget? • Does the entrepreneur save regularly and if so where is the money invested? • What are the factors that the entrepreneur considered before saving in that particular outfit? • Does the entrepreneur do any kind of banking and if so where and what are the factors they considered before settling for this particular facility?

  25. 1.6 Research questions • If banking with the mainstream financial facility, does the entrepreneur know what fees and levies are charged for running the account, statements, transaction and overall cost of maintaining an account at that particular facility? • How well does the entrepreneur keep track of her money? • Is the entrepreneur able to compute the amount of profits per item? • What are the main sources of funding for the businesses and why that particular kind of funding? • What are the alternative sources of funding that the entrepreneur is aware of?

  26. 1.6 Research questions • Which is the cheapest money available in the market according to the entrepreneur and the reasons for thinking so? • Is the entrepreneur the sole decision maker on matters of finances in the business? • Has the entrepreneur ever tried to get financial services like loans and overdrafts from Mainstream Financial Institution and how easy was it to get the services? • How accessible are finances from the mainstream banking services?

  27. 1.6 Research questions • How easy is it for the entrepreneur to find out information about financial services available to women entrepreneurs? • Does the entrepreneur feel the need for receiving financial education and how would they like the education to be delivered?

  28. 1.7Assumption of the study • The study is based on the following major assumptions: • That a person who has completed Primary Education regardless of the outcome has basic literacy. • Despite the many ambitious and noble initiatives by the Governments of the two countries, financial institutions, private sectors, and NGOs to empower women economically, their initiatives are yet to be felt significantly by the target group. • Low financial literacy level is excluding many women from the mainstream financial services like banks in the country. • With more financial literacy, the women entrepreneurs in Kenya and South Africa would change the way they do business in a significant way.

  29. 1.8 Scope and limitations of the study • The study will be limited to women entrepreneurs from Nairobi in Kenya and in South Africa; Durban.

  30. 1.9 Significance of the study • According to the researcher no such survey has been carried out in these two countries. The results of the findings will hopefully form the basis for future National Financial Literacy Surveys. • The findings will also be of particular importance to both Governments and organizations involved with economic empowerment of women for they will have a better understanding of their clientele’s FL level thereby enabling them to improve on their strategies.

  31. 2.0 Literature review • The literature for the study will be reviewed mainly from electronic journals, newspapers, financial magazines, Institutions Websites, promotional materials and advertisements in both the print and electronic media by the stakeholders as they carry current information. However other sources will include; books, conference papers, research publications, Government publications. The literature reviewed will both be primary as well as secondary.

  32. 3.0 Research design and methodology • The study will be carried out using the survey research method. (Neuman: 2006) • Only a small sample will be taken and findings generalized to entire population. • Both qualitative and quantitative research techniques will be used. • Qualitative technique will be used so as: 1. to capture complexities of phenomena by carrying out an in-depth survey on the target population thereby collecting a lot of data.

  33. 3.1 Research method cotd. 2. It will help describe and evaluate the role of FL among women entrepreneurs. 3. Used to build theories. Quantitative research technique will be used to: 1.Gather information on the relationship between various variables of the study. 2. Present some data in form of statistics and aggregated data.

  34. 3.2 Target population • Women entrepreneurs in a continuous and regular activity that has income or profit as its primary purpose. • Enterprise must be registered and licensed by Local Authority. • Must have a physical location. • Financial institution will include Organizations that have been granted licenses by the Central Bank to offer financial services and have special programmes for women.

  35. 3.3 Sampling • The study will use both probability and non probability sampling techniques to create a sampling frame. • In probability sampling use stratified sampling to ensure that different kinds of businesses would be included in the survey. • Once strata are identified then use non probability sampling to carry out the real study. These will include, quota sampling, purposive technique and snowballing

  36. Sampling frame Strata No. • Food and beverages 30 • Hair and cosmetics 25 • Clothing and textiles 25 • General Grocery store 40 • Educational Institution 20 • Private professional practice 20 • Stationary/bookstore/printing 20 • Others 20 Total sample 200

  37. Sampling frame cotd. • These total sample is for individual countries. The total sample for the whole study will therefore be 400 samples. Justification. • According to Gay (1996) as quoted by Leedy and Ormrod(2002:p.221) when the sample size is above 5000, then population size is almost irrelevant, and a sample size of 400 is adequate

  38. Sampling frame cotd. • For Financial Institution only those organizations that have been licensed to offer financial services and have programmes tailor made for women will be included in the survey. These may include, Unit Trusts, Micro finances, Banks both local and International.

  39. 3.4 Research Instruments • Detailed questionnaire that will be both structured as well as open-ended. • Interview schedule. • Unobtrusive observation will be used to find out how business is carried out noting things like recording of transactions. • Existing statistical reports e.g government and UN Country reports or previously conducted surveys to address research questions.

  40. 3.5 Data collection procedure • Meet necessary legal requirements • Recruit and train two Research Assistants for each country during the piloting Phase. • Interviews by appointment.

  41. 3.6 Pilot study • Pilot study to be carried out in both countries. • Main aim is to test reliability of questionnaires. • Population for the pilot study will be 10% of the sample population.

  42. 3.7 Data presentation and analysis • Quantitative data analyzed using Statistical Package for Social Sciences (SPSS) to determine frequencies, percentages and relationships among variables. • For qualitative data, use content analysis to identify patterns, themes and biases.

  43. 4.0 Dissemination of research findings. • The research findings will mainly be disseminated by means of a thesis. Other methods will include; publication in peer-reviewed journals both print and electronic, conferences, seminars and workshops.

  44. 5.0 Structure of the thesis • Chapter1: Introduction and background to the study. • Chapter 2: Conceptualizing Financial Literacy • Chapter 3: Theoretical framework • Chapter 4: Literature review • Chapter 5: Research design and methodology • Chapter 6: Data presentation and analysis • Chapter 7: Discussion of findings • Chapter 8: Summary, conclusions and recommendations

  45. REFERENCES • ACRL. 2000. Association of College and Research Libraries. [Online]. Available: http://www.ala.org/acr/standards/informationliteracycompetences.cfm • (Accessed on 11th February 2008). • Bhandary, K. M. 2000. Information Literacy and Librarians Role. [Online]. Available: http://www.tulc.org (Accessed 13th February, 2008) • BuaNews (Tshwane), 10 February 2008. MEC, Financial Literacy Project Toast Milestone. [Online]. Available: http://www.allafrica.com (Accessed 11th February, 2008) • Government of Canada, 2003. Building on our competences: Canadian results of the International Adult Literacy and Skills Survey. [Online]. Available: http://www.statcan.ca (Accessed 25th February, 2008)

  46. REFERENCES • Government of Kenya and UN 2003. Millennium Development Goals: progress report for Kenya. [Online]. Available: Http://www.gok.co.ke (Accessed on 22nd February, 2008) • Government of Kenya, MOEST 2004. Report of the National Conference on Education and Training 2003. [Online]. Available: Http://www.gok.co.ke (Accessed on 22nd February, 2008) • Government of Kenya, 2006. National Economic and Social Council of Kenya. Vision 2030. [Online]. Available: http://www.nesc.go.ke (Accessed on 24th February, 2008) • Government of Kenya, 2007. Ministry of Information and Communication Draft :. Freedom of Information Policy Bill 2007. [Online]. Available: Http://www.gok.co.ke (Accessed on 22nd February, 2008)

  47. REFERENCES • Government of Singapore, 2005. National Financial Literacy Survey 2005: findings and recommendations. [Online]. Available: http://www.moneysense.gov.sg (Accessed on 22nd February, 2008) • Government of South Africa, 2008. Africa 2010. Address by Thambo Mbeki on the state of the Nation to the joint Sitting of Parliament [Online]. Available: www.sa2010.gov.za/opp/economy.php#bee (Accessed on 11th February, 2008). • Lusardi, A. and Mitchell, O. S. 2007. Financial literacy and retirement preparedness: evidence and implications for financial education. [Online]. Available: http://www.EBSCO.com (Accessed on 24th February, 2008) • Neuman,W. L. 2006. Social research methods: qualitative and quantitative approaches. 6th ed. Boston: Allyne and Bacon.

  48. REFERENCES • Parker, J. S. 2006. Down from the Summit. London; Sage. Information Development, Vol. 22,(1) Feb 2006 ISSN 0266-6669 • Underwood, P. 2002. South Africa: A Case Study in Development Through Information Literacy. [Online]. Available http://www.nclis.gov/libinter/infolitconf&meet/papers/underwood-fullpaper.pdf (Accessed on 22nd February, 2008) • Vuotto, F. 2004. Information competences as a value-added product: applying the business model to academe. [Online]. Available: http://www.emeraldinsight.com/0090-7324.htm (Accessed on 9th October 2007) . • WSIS, 2005. World Summit on the Information Society outcome Documents: Geneva 2003-Tunis 2005. [Online]. Available: http://www.itu.int/wsis/outcome/booklet.pdf (Accessed on 26th February 2008)

  49. APPENDIX 1: WORK PLAN

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