Effect Of Socioeconomic Dynamics on Financial Inclusion of Business Women in Isiolo County, Kenya

Abstract

Financial inclusion has increasingly been recognized as a central driver of economic empowerment, poverty reduction, and inclusive growth, particularly among marginalized and underserved groups. In the Kenyan context, and more specifically in Isiolo County, business women continue to face notable challenges in accessing and fully utilizing financial services, despite the rapid spread of mobile banking technologies and the government’s formulation of policies aimed at supporting inclusion. These persistent barriers are largely attributed to a range of socioeconomic factors that either limit or enhance women’s ability to participate in the financial ecosystem. This study was designed to investigate how specific socioeconomic variables namely employment opportunities, cultural norms, financial literacy, and infrastructure availability affect financial inclusion among business women in Isiolo County. The research was anchored in four theoretical perspectives: the Resource-Based View, Institutional Theory, Financial Literacy Theory, and Diffusion of Innovation Theory. Methodologically, the study adopted a descriptive cross-sectional design, with a target population of 920 female entrepreneurs operating in Isiolo County. From this group, a sample of 279 respondents was drawn using a cluster sampling approach to ensure adequate representation across different business segments and localities. Data were collected through structured questionnaires and analyzed using both descriptive and inferential techniques to generate a comprehensive understanding of the relationships involved. The findings demonstrated that each of the four socioeconomic factors had a substantial influence on women’s financial inclusion. Employment opportunities were found to enhance women’s financial independence and capacity to interact with financial institutions, while cultural norms shaped attitudes, expectations, and levels of economic engagement. Financial literacy played a crucial role by equipping business women with the knowledge and skills needed to navigate financial systems, and infrastructure development, such as transport networks and digital connectivity, proved indispensable in facilitating access to financial services. The study concludes that financial inclusion for business women in Isiolo County depends significantly on aligning these socioeconomic factors. It recommends policy interventions focused on expanding employment opportunities, implementing culturally sensitive reforms, scaling up financial literacy programs, and investing in infrastructure to foster inclusive economic growth.