THE FACTORS INFLUENCING THE SAVINGS
DECISIONS AMONG KENYAN PROFESSIONAL
FOOTBALL PLAYERS
BY
IRUNGU ELIUD MWANGI
UNITED STATES INTERNATIONAL UNIVERSITYAFRICA
SPRING 2017
THE FACTORS INFLUENCING THE SAVINGS
DECISIONS AMONG KENYAN PROFESSIONAL
FOOTBALL PLAYERS
BY
IRUNGU ELIUD MWANGI
A Research Project Report Submitted to the Chandaria School of
Business In Partial Fulfillment of The Award of Master’s Degree in
Business Administration (MBA)
UNITED STATES INTERNATIONAL UNIVERSITYAFRICA
SPRING 2017
DECLARATION
I, the undersigned declare that this is my original work and that it has not been submitted
to any other College, Institution or University other than United States International
University for academic purposes.
Signed: ________________________
Date: _______________________________
Eliud Mwangi Irungu (ID: No:625756)
This project has been presented for examination with our approval as university
supervisors.
Signed: ________________________
Date: _______________________________
Dr. Amos Njuguna
Signed: ________________________
Date: _______________________________
Dean, Chandaria School of Business
ii
COPYRIGHT
All the rights reserved. No part of this report may be photocopied, recorded or otherwise
reproduced, stored in a retrieval system or transmitted in any electronic or mechanical
means without prior permission of the copyright owner.
Eliud Mwangi Irungu. Copyright © 2016
iii
ABSTRACT
The purpose of this study was to determine the factors that influence saving decisions of
professional football players in the Kenyan Premier League. The research was guided by
the following research questions: What factors influence savings decisions amongst
professional footballers in Kenya? What challenges do Kenyan footballers face in attempt
to increase their savings and what can be done to break these barriers? A descriptive
research was used on a target population of the players under contract with the Kenya
Premier League teams in Nairobi for the 2015/2016 season grouped in 16, with each team
having a minimum of 11 starting players giving an approximate population of 176
players. A sample of 88 players was used by a random sample of 8 teams located in
Nairobi. Both qualitative and quantitative data was analyzed, and the results presented in
percentages, means, standard deviations, frequencies. A Pearson’s correlation was
conducted to test the degree of correlation between the variables.
The study established factors that influence savings amongst the footballers as level of
education, level of income, family background, peer pressure, age, knowledge about
saving schemes, trust in financial institutions, perception about the future, rate of
inflation, increased availability of borrowing opportunities, availability of credit facilities
from shops and friends, real interest on savings deposits and the length of contract are
some of the factors that influenced the savings decisions.
The challenges facing Kenyan footballers when saving include fluctuating income, the
management of clubs, knowledge of finance, family background, the cost of living and
day to day expenses and the availability of cheap credit were noted to be some of the
challenges facing their savings decisions. Strategies to overcome the barriers to savings
include financial literacy programs, getting other sources of income, tailor made products
by banks, increase in savings interest rates and use of budgets.
Since the study focused on individual factors influencing savings decisions, it is
recommended that other studies be done to determine how group factors and external
factors that cannot be controlled influence savings decisions and investment decisions.
The study only focused on 8 clubs and therefore these results are skewed towards the
perceptions and data from the 8 teams. It is suggested therefore that such a study be done
in other teams and leagues to increase the statistical power of the study and make the
results more reliable.
iv
ACKNOWLEDGEMENT
I would like to give thanks to God for the guidance and strength he has given me up to
this final stage of my graduate studies. I also give special appreciation to my family for
the continued support and to my supervisor, Dr. Amos Njuguna for his patience,
motivation, insightful comments, encouragement and hard questions which challenged
me to widen my research from various perspectives throughout this thesis.
v
DEDICATION
I would like to dedicate this proposal to my family, my loving parents and brother for
their sacrifice, motivation and support throughout my MBA program, without them this
research would not have been possible.
vi
TABLE OF CONTENTS
DECLARATION................................................................................................................ii
COPYRIGHT ................................................................................................................... iii
ABSTRACT ....................................................................................................................... iv
ACKNOWLEDGEMENT ................................................................................................. v
DEDICATION................................................................................................................... vi
LIST OF TABLES ............................................................................................................ ix
LIST OF FIGURES ........................................................................................................... x
CHAPTER ONE ................................................................................................................ 1
1.0 INTRODUCTION........................................................................................................ 1
1.1 Background of the Problem ........................................................................................... 1
1.2 Statement of the Problem ............................................................................................... 4
1.3 Purpose of the Study ...................................................................................................... 5
1.4 Research Questions ........................................................................................................ 5
1.5 Importance of the Study ................................................................................................. 5
1.6 Scope of the Study ......................................................................................................... 6
1.7 Definition of Terms........................................................................................................ 6
1.8 Chapter Summary .......................................................................................................... 7
CHAPTER TWO ............................................................................................................... 8
2.0 LITERATURE REVIEW ........................................................................................... 8
2.1 Introduction .................................................................................................................... 8
2.2 The Factors Influencing Savings Decisions ................................................................... 8
2.3 Challenges facing Kenyan footballers when Saving ................................................... 15
2.4 Solutions to These Challenges ..................................................................................... 19
vii
CHAPTER THREE ......................................................................................................... 24
3.0 RESEARCH METHODOLOGY ............................................................................. 24
3.1 Introduction .................................................................................................................. 24
3.2 Research Design........................................................................................................... 24
3.3 Population and Sampling Design ................................................................................. 24
3.4 Data Collection Methods ............................................................................................. 25
3.5 Research Procedures .................................................................................................... 26
3.6 Data Analysis Methods ................................................................................................ 27
3.7 Chapter Summary ........................................................................................................ 28
CHAPTER FOUR ............................................................................................................ 29
4.0 RESULTS AND FINDINGS ..................................................................................... 29
4.1 Introduction .................................................................................................................. 29
4.2 General Information ..................................................................................................... 29
4.3 Factors influencing savings decisions. ......................................................................... 36
4.4 Challenges facing Kenyan footballers when saving. ................................................... 42
4.5 Solutions to the challenges facing Kenyan footballers when saving. .......................... 45
CHAPTER FIVE ............................................................................................................. 50
5.0 DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS ........................ 50
5.1 Introduction .................................................................................................................. 50
5.2 Summary ...................................................................................................................... 50
5.3: Discussions ................................................................................................................. 52
5.4 Conclusion ................................................................................................................... 58
5.5 Recommendation ......................................................................................................... 59
REFERENCES ................................................................................................................. 61
APPENDICES .................................................................................................................. 71
APPENDIX I: QUESTIONNAIRE ................................................................................ 71
viii
LIST OF TABLES
Table 4.1 Response Rate .................................................................................................... 29
Table 4.2 Position in The Team ......................................................................................... 31
Table 4.3 Level of Education ............................................................................................. 36
Table 4.4 Level of Income ................................................................................................. 36
Table 4.5 Family Background............................................................................................ 37
Table 4.6 Peer Pressure ...................................................................................................... 37
Table 4.7 Age of Player ..................................................................................................... 38
Table 4.8 Knowledge of Savings Schemes ........................................................................ 38
Table 4.9 Trust in Financial Institutions ............................................................................ 39
Table 4.10 Perception about the future .............................................................................. 39
Table 4.11 Rate of Inflation ............................................................................................... 40
Table 4.12 Availability of Borrowing Facilities ................................................................ 40
Table 4.13 Availability of Credit Facilities ....................................................................... 41
Table 4.14 Real Interest on Savings Deposits ................................................................... 41
Table 4.15 Length of Contract ........................................................................................... 42
Table 4.16 Fluctuating Income .......................................................................................... 42
Table 4.17 The Management of Clubs ............................................................................... 43
Table 4.18 Knowledge of Finance ..................................................................................... 43
Table 4.19 Family Background.......................................................................................... 44
Table 4.20 Cost Of Living ................................................................................................. 44
Table 4.21 Availability of Cheap Credit ............................................................................ 45
Table 4.22 Financial literacy.............................................................................................. 45
Table 4.23 Other Sources of Income ................................................................................. 46
Table 4.24 Tailor Made Bank Products ............................................................................. 46
Table 4.25 Increased Interest Rates ................................................................................... 47
Table 4.26 Use of a Budget................................................................................................ 47
Table 4.27 Degrees of correlation with the level of education .......................................... 48
ix
LIST OF FIGURES
Figure 4.1 Age of Respondents. ......................................................................................... 30
Figure 4.2 Gender Representation ..................................................................................... 30
Figure 4.3 Years of Playing Experience ............................................................................ 31
Figure 4.4 Level of Education ........................................................................................... 32
Figure 4.5 Marital Status.................................................................................................... 32
Figure 4.6 Bonuses............................................................................................................. 33
Figure 4.7 Length of Contract in years .............................................................................. 33
Figure 4.8 Savings ............................................................................................................. 34
Figure 4.9 Medium of Saving ............................................................................................ 34
Figure 4.10 Presence of Saving Scheme ............................................................................ 35
Figure 4.11 Increased Contract period ............................................................................... 35
x
CHAPTER ONE
1.0
INTRODUCTION
1.1
Background of the Problem
At the macroeconomic level, individual saving benefits the entire nation. Saving has a
positive impact on the economy because funds that are placed in financial assets are then
channeled through financial intermediaries to fund investments by firms. Subsequently,
investments by firms will ultimately benefit the nation through higher productivity and
economic growth. Furthermore, high savings can also hedge countries against economic
downturns and financial crisis. One of the avenues to boost national saving is by
encouraging individuals to increase personal saving(Davis & Hu, 2005).This can be
achieved by implementing financial educational programs to increase individuals’
financial literacy, i.e. to heighten understanding of their own financial circumstances,
enable them to make financial plans, and choose the most appropriate financial
instrument that will help them achieve their financial goals (Jonubi & Abad, 2013).
In a study of the Malaysian economy, Chua (2012) assert that high levels of saving
indicate an economy that is in good condition. They argue that policies which support
saving should be performed because saving is a source of economic development through
its effect on capital structure. Thus, high saving rates display the meaning of a ‘boosting
economy’, rather than a ‘freezing economy’ (Tang & Chua, 2009). The life-cycle saving
theory advanced by Modigliani, Brumberg, (1954) posits that individuals will follow a
hump-shaped saving pattern over their lifetime. During high earning periods of
employment, individuals will save increasing amounts and smooth out expenditure.
During low income levels (for instance, prior to employment earning periods, and later,
during retirement), people will use up their savings to fund their lifetime spending needs.
Savings play an important role in maintaining economic growth. Although its role is
important at different levels, namely households, companies and government, the three
entities however, are closely interlinked. For instance, if households save too little, they
might face financial difficulties in addition to having deficient emergency savings which,
in turn, will increase anxiety and leads to serious health problems (Prawitz, Garman,
Sorhaindo, O'Neil, Kim, &Drentea, 2006). On the broader perspectives, there will be
insufficient funds available for the government to invest in social and physical
1
infrastructure. Funds which are placed in financial assets are channeled through financial
intermediaries for investments, and subsequently, enriching the country through higher
productivity and economic growth. Domar and Tang argued that the speed of long run
economic growth depends on the ability to save since a high savings rate will increase
investments, affect capital accumulation and consequently stimulate economic growth
(Domar (1946) ;Tang (2008) ).
High savings leads to accumulation of wealth that allows individuals to improve their
living standard (Bernheim, Forni, & Gokh, 2000) and could hedge the country against
economic downturns and financial crisis, insuring against time of economic shocks and
an important way of improving well-being (Mahdzan & Tabiani, 2013). In some
countries, savings are considered as backbone to certain sectors of its economy. In
Azerbaijan for instance, household savings is regarded as the most important investment
resource for the development of the non-oil sector, whilst its foreign capital contributing
more on production of natural resources like oil and gas (Bairamli & Kostoglou, 2010).
To summarize, individual savings will not merely benefit households, but benefitting the
entire nation, as well. Therefore, it is important to have the knowledge on factors
influencing individuals’ saving behavior as it is essential in maintaining the economic
growth since it will give benefits to the entities involved such as households, financial
institutions, government and other related stakeholders.
Evidence has shown that football is the mostpopular sport throughout the world and in
many countries it is recognized as a national sport ,Elahi (2004). Today there are
millions of football fans indicating a growing tendency toward the sport, a lot of dramatic
changes have been made to the extent that the current professional football can’t be
compared with the past according to Williams (2002).
In Kenya, football was introduced by the British settlers at the beginning of the 20th
Century according to Njororai (2009). It grew in significance until the early 1990s,
subsequent years saw a decline in the performance and sustainability of the Premier
League, the top domestic football league in Kenya. Along the way, teams such as
Shabana FC were disbanded due to financial constraints. Rintaugu,Mwisukha & Onywera
(2012) noted that football in Kenya has suffered from corruption, mismanagement and
political intrigue, resulting in the country’s failure to make any significant impact in
regional, continental or global competitions. According to Makori (2010), the national
2
domestic football league is not viewed as a financially viable investment and relies on the
goodwill of sponsors, well-wishers and even the personal funds of team officials to keep
the tournament on its feet. This state of affairs continues to deny Kenya’s fledgling pool
of talented players a stage of repute to hone their skills and eke out a decent living from
association football.
Recently though we have seen the emergence of corporate sponsors like Supersport, East
African Breweries Limited and currently SportPesa as title sponsors of the league. This
means that large sums of money have been poured into the Kenya Premier league.
According to Isaac Swila a writer of the Daily Nation, “The top tier will now assume the
name SportPesa Premier League after the betting firm and KPL entered into the
sponsorship package that takes effect immediately and is expected to run until the end of
the 2019 season. “The value of the package was not made public but sources privy to the
details of the deal intimated to Daily Nation Sport that the parties agreed on a Sh80
million annual fee with a 10 percent annual increment bringing the total figure over the
entire duration of the contract to around Sh360 million.”(Swila, Daily Nation, 2015).
These are recent and new developments in the past though things seemed to be quite
different given the status of our legendary footballers who we seem to see languish in
poverty compared to their counterparts from Western countries. Famous players like Joe
Kadenge, Bobby Ogolla and Mahmoud Abbas are toughing it out to make ends meet
states Oduo(2015). Musungu states that it is very disheartening seeing former Gor Mahia
and Harambee Stars captain Julius Owino suffering in his life after football. According to
him the former right back nicknamed ‘Awilo’ collects and sells plastics along Nairobi’s
Jogoo Road to earn a living. ‘Awilo’ cannot even pay up his rent, for a one roomed house
in Makongeni. He further states that Owino is just one out of the many cases of former
Kenyan footballers suffering after the end of their football careers. Other examples are
former Kenya Breweries (now Tusker FC), Shabana FC and Harambee Stars’ striker
Henry Motego, who makes a living working in construction sites. He addeds that former
AFC Leopards’ legend Francis Oduor sells maize for a living in the streets of Nakuru
town (Musungu, 2013).
According to him there are a few isolated cases of players who have made it after their
lives as footballers, a huge number of them on the other handremain oppressed in
suffering. These examples indicate how poor the footballers were when it came to
3
financial literacy and planning for life after retirement because from the cases it is as
though they never pictured themselves retiring after football. Musungu(2013)suggests the
best way to equip retired footballers is to give them regular advice on investment as well
as urging them to go back to school with their earnings..
Ohaya, Misigah and Kinyanjui (2014) examined the factors that influence investment
initiatives amongst Kenyan footballers who are locally based. They found out that there is
a low financial literacy among the Kenyan footballers, peer and parental pressure had
great influence on the investment attitude of the footballers. There is also a need to
provide extra knowledge on financial matters to the Kenyan football players, the Kenyan
football clubs and the stakeholders. According to them efforts should be done to increase
football players’ participation in the management of personal finances. Immediate
measures are to incorporate all stakeholders and professionals is used to initiate education
and training to football players in Kenya on personal financial matters to help them invest
in long-term steady income generating projects so that they can be successful both on and
off the pitch and can be prepared for retirement (Wanyangu, 2010).
1.2
Statement of the Problem
Most professional athletes are often guilty of blindly investing and squandering large
sums that wind up yielding little or no return, due to ill-advised information and money
managers. Professional athletes may rake in multimillion dollar salaries; however, they
also walk a tight rope of risking career ending injuries at any given moment(Dunavant,
2012). The majority spend far more than what is realistically sustainable given their
income volatility and short career spans. Therefore the financial planning process is
essential for professional athletes. Without the proper financial education, they do not
know how to maximize their wealth let alone save(Evensky, Horan, & Robinson, 2011).
These days, footballers earn a good amount of money and they need to be advised on how
to invest for a better tomorrow. Most of these footballers come from a poor background
and a sudden influx in income might disorient them. Most of them (players) end up
engaging in dangerous drinking habits, coupled with the attention they receive from
women. In no time, they end up spending a huge percentage of their income in alcohol
and women (Rodgers, 2014) . One of the leading local footballers Allan Wanga advises
players’ in the country to focus on the future and not just blossom on current limelight.
The striker who turned out for AFC Leopards’, started off his career with Tusker FC,
4
played for Sofapaka and also played in Angola for Petro Atletico where he won two
consecutive league titles. He has also had stints in Azerbaijan, all of which have earned
him good money. He is quoted as saying “Football is a short term career. If you get the
opportunity of earning good money, take time to invest. You will have a family and your
life as well. Once your career ends at the age of 33-40, where will you go? All players
must know that as a fact and take time to look at their lives after football,” Wanga advises
(Musungu, 2013) .
A study conducted by Ohaya et al(2014) analyzed the factors that influence investment
initiatives amongst Kenyan footballers who are locally based. However, their analysis
only looked at investment decisions and not savings decisions. There is scanty literature
highlighting the specific factors that influence footballer’s savings decisions. Hence this
study sought to close the knowledge gap arising when it comes to knowledge about
footballer’s savings decisions by determining the factors influencing saving decisions of
football players in the Kenyan Premier League.
1.3
Purpose of the Study
The purpose of this study was to determine the factors influencing saving decisions of
professional football players in the Kenyan Premier League.
1.4
Research Questions
1.4.1 What factors influence savings decisions amongst professional footballers in
Kenya?
1.4.2 What challenges do Kenyan footballers face in attempt to increase their savings?
1.4.3 What can be done to break these challenges?
1.5 Importance of the Study
This study is set to benefit the following stakeholders.
1.5.1 Kenyan Football Players and Kenyan Football Teams
Kenyan football players will be made aware of the need to save and invest the money
they earn wisely no matter how little it is. They will be able to see the different solutions
to the challenges facing their saving decisions. Football teams will be able to understand
why their players don’t save. They will be able to develop programs and trainings based
5
on the recommendations of this study to advise their players appropriately. They could
even start saving schemes for their players.
1.5.4 Policy Makers
Policy makers will be able to come up with laws and regulations that will prevent the
exploitation of young and talented footballers. The research could be used to develop a
frame work for negotiating a minimum wage for professional footballers in Kenya.
1.5.5 Researchers
Researchers will benefit from this study in that areas for further study will be
recommended at the end of the study. They can build on the findings and also help
improve on the situation that is currently there.
1.5.6 Government
The government can mobilize, train, and educate the sportsmen on savings and
investment decisions as significant contributors to the GDP.
1.6
Scope of the Study
This research focused on football players in the Kenyan Premier league which is the top
league in Kenya. The study focused mainly on players around Nairobi because of their
proximity. This enabled the researcher to work within the allocated time frame and
financial budget. The time frame of the project is between May 2016 and April 2017.
Limitations that might occur are low literacy levels therefore respondents might not fill in
questionnaires correctly. This is because many in the Kenyan football industry are
assumed to have reached just high school level of education.
1.7
Definition of Terms
1.7.1 Financial Investment
It is an asset that you put money into with the hope that it will grow or appreciate into a
larger sum of money. (Ball, Geringer, Minor, & McNett, 2012).
1.7.2 Savings
Savings, per Keynesian economics, consists of the amount left over when the cost of a
person's consumer expenditure is subtracted from the amount of disposable income he
earns in a given period of time, Keynes (1937)
6
1.7.3 Financial Literacy
Financial literacy can be defined as the ways how people manage their money in terms of
insuring, investing, saving and budgeting (Hogarth & Hilgert, 2002)
1.8
Chapter Summary
This chapter described the purpose of the study being to find out the factors influencing
investment decisions by professional football players in the Kenyan premier league. The
research questions were: What factors influence savings decisions of professional
footballers in Kenya? What challenges face Kenyan footballers when saving? What can
be done to break these challenges?
Chapter 2 is the literature review, where the researcher analyzed and reviewed articles on
this topic to gain a clear understanding of their findings. The findings formed the basis for
this research paper that bridges the knowledge gap by building on existing information
while at the same time relating them to the domestic scenario. The literature review set
the tone for the research design where an appropriate data collection, analysis and
presentation method was identified. Chapter 3 described the methodology applied in
conducting research. Then, Chapter 4 presented the analysis of findings. Finally, Chapter
5 discussed research findings, drew conclusions and gave recommendations.
7
CHAPTER TWO
2.0 LITERATURE REVIEW
2.1 Introduction
This chapter, reviews literature and discusses concepts and theoretical discourse
underpinning the research questions of this study. These are: The factors influencing
savings decisions; the challenges facing Kenyan footballers when saving and solutions
towards mitigating these challenges.
2.2
The Factors Influencing Savings Decisions
2.2.1 Education
It is hypothesized that education level has a positive impact on individual saving. Higher
education levels imply that people have a better understanding of their personal financial
matters, so they will be better able to make financial decisions and have more ability to
plan for their future. There is evidence to show that more educated people can manage
their money in terms of insuring, investing, saving and budgeting (Hogarth & Hilgert,
2002).
Results of a study by Lusardi & Mitchell(2007)show that people with a low level of
education, females, African-Americans and Hispanics, demonstrate low levels of
financial literacy, which subsequently affect financial decision-making. Results of the
study found that these groups of respondents fail to plan properly for their retirement
period, have less participation in the stock market, and have poor borrowing behavior,
possibly due to lack of knowledge in basic financial concepts. Another study conducted
on financial literacy of Malaysian degree students, explored student’s background,
financial attitude and knowledge (Ibrahim, Harun, & Isz, 2010). The study found that
most of the students required more proper practice on money management skills.
Chen and Volpe (1998) examined financial literacy amongst more than 900 students in 14
American universities. By linking the scores to individuals’ socioeconomic and
demographic attributes, results showed that young females with non-business majors and
little work experience have very low degrees of financial literacy. In a survey of an
Australian regional university, most of the participating students scored well for financial
8
literacy and knowledge. Business students scored better in comparison with other majors
(Delpachitra & Beal, 2010).
From the above literature, it can be clearly seen that there is a strong correlation between
one’s education level and their financial decision making capabilities. It seems the higher
one goes academically the better their financial decision making skills.
2.2.2 Income level
According to Lusardi and Browning (1996) “the distribution of saving across income
groups shows a very strong positive relationship between income and saving. In
particular, a large proportion of total saving is due to families in the top part of the
income distribution.” This is supported too by Avery and Kennickell (1991), an
overwhelming proportion of total saving is due to top income decile of families. The
same finding is reproduced in Bosworth, Burtles and Sabelhaus (1991) where they find
that saving is usually negative for the first and second income quintile and highest in the
top quintile. The aforementioned studies show that income is positively related to
individual saving, simply because people have or should have more money to save. So
they may be able to save more, or at least have some saving. A rising income will often
be accompanied by in-creased saving, and a falling income by decreased saving, on a
greater scale at first than subsequently.
Increases in current income increase both consumption and saving. Because the marginal
propensity to consume the fraction of additional income consumed is less than 1. Higher
expected future income raises current consumption even at the same current income level,
so current saving declines (Modigliani & Brumberg, 1954).
Katona (1949)states that the effects of income on savings decisions can be summarized
into 3 different hypotheses. Hypothesis I: A decline in income will tend to lead to a
reduction in the amounts saved or to a change from saving to dissaving. This will be the
case particularly if those whose income declined are optimistic (consider the decline in
their income temporary).
Hypothesis 2: An increase in income, and especially a large increase, may result in a
reduction of the amounts saved or even in a change from saving to dissaving. In place of a
smooth adjustment to the new income level, such behavior may occur especially if people
9
believe that their financial situation improved permanently or if they anticipate further
income increases.
Hypothesis 3: Expected income declines will tend to increase the amounts saved,
irrespective of past income changes. These hypotheses have the advantage of linking the
analysis of the consumption function with business cycle theory. This means, however,
that they must be tested at different phases of the cycle, so that the conditions under
which they are valid may be determined
2.2.3 Family background factors
Family background plays a big role in people’s savings and spending habits. Different
members of the family have different financial needs. Single parent families and nuclear
families do not necessarily have the same type of saving and spending cultures. When
people marry, have children, or separate through divorce or widowhood, they can
experience dramatic changes in their financial positions. Wealth increases or divides;
spending needs change in relation to housing and children; and new expectations are
formed regarding future income, longevity, and savings needs. (West & Worthington,
2016).
Family transitions constitute an important source of risk, with the potential to affect
everything from wealth accumulation (Cubeddu and Ros-Rull, (2003); Scholz and
Seshadri, (2007)) to the demand for life insurance (Hong & Rios-Rull, 2007)and as well
as savings decisions. Viewed as a source of background risk, there is reason to expect that
these shocks to family composition also play a role in determining the demand for risky
assets and also savings decisions by individuals.
Previous studies support the intuition that children and marital status can have large
effects on life-cycle saving decisions. Scholz and Seshadri (2007) simulate wealth
distributions and conclude that children have a substantially larger effect on net wealth
compared with the effects of means-tested social insurance programs, which were
themselves shown to have a large impact on the wealth accumulation of lower-income
households (Hubbard, J, & Zeldes, 1995). In terms of marital status, Cubeddu and RosRull (2003) and Hong and Ros-Rull (2007)conclude that the risks associated with changes
in marital status can have a substantial effect on the evolution of wealth and the demand
for life insurance.
10
2.2.4 Peer pressure factors
Peer effects have been widely shown to affect behavior, for example with respect to
productivity at work ( (Ichino & Falik, 2005) ; (Mas & Moretti, 2009); (Bandiera,
Barankay, & Rasul, 2010)), alcohol consumption (Glaeser, Sacerdote, & Scheinkman,
2003); (Kremer & Levy, 2008), contributions to public goods ((Frey & Meier, 2004)
(Shang & Croson, 2009); (Simons-Morton & Chen, 2006); (Kast & Pomeranz, 2012)
(Della, Stefano, List, & Ulrike, 2012)), and
financial decision-making ((Duflo &
Emmanuel, 2003); (Hong, Kublik, & Stein, 2004) (Bursztyn, Ederer, Ferman, &
Yuchtman, 2012). Individuals can use these effects strategically to overcome self-control
problems by joining self-help peer groups as a commitment device (Battaglini, Roland, &
Jean , 2005); (Schelling, 1984)), such as for example Alcoholics Anonymous (AA),
weight-loss groups, running groups, or savings clubs.
This approach is particularly important where other formal commitment devices are
inaccessible. Notably in the area of savings, other mechanisms such as defaults and direct
deposits from wages, which have been found to be highly effective (Madriana & Dennis,
2001); (Thaler & Benartzi, 2004), are not available to the millions of people worldwide
who work in the informal sector or as independent entrepreneurs, and therefore do not
have a formal wage bill.
2.2.5 Age
Much of the research on the influence of age on saving is motivated by the life-cycle
hypothesis proposed by (Modigliani & Brumberg, 1954). The Life Cycle Hypothesis
argues that individuals will smooth consumption over their lifetime given expected
lifetime resources. The theory leads to the prediction that individuals will exhibit a saving
rate that rises with income during their work life, and declines and turns negative during
retirement.
It is expected that when age increases, people save more money, because elderly people
are more likely to be concerned about their retirement period. After retirement savings
decreases as now they will be spending and meeting their health costs. Furthermore,
elderly people have lower life-cycle expenses such as education, wedding and house
expenses. It is posited that age is positively related to individual saving. In the traditional
lifecycle view of saving, households maximize utility over the lifecycle, resulting in a
profile whereby they borrow when young, save in mid-life, and spend down their assets
11
when older. According to Hershfield , Goldstein, Sharpe Fox, et al (2011) people
estranged from their future selves, saving is like a choice between spending money today
or giving it to a stranger years from now. Presumably, the degree to which people feel
connected with their future selves should make them realize that they are the future
recipients and thus should affect their willingness to save. To the extent that people can
feel more connected with a vividly imagined future self, they should be motivated to save
more money for the future
2.2.6 Trust in Financial Institutions
Trust also may explain some shortfalls in the relationship between savers and formal
financial institutions. Trust affects the willingness of individuals to use a particular
financial institution based on their subjective assessment of its reliability. Regulatory
barriers, often defended as enhancing overall trust in an institution, frequently include
requirements such as “know your customer” rules, which can hinder participation in the
banking system for the poor. Trust thus affects relationships between regulators and
financial institutions as well. In any economic transaction, one party’s lack of trust in the
other acts as an implicit cost due to moral hazard and either increases monitoring and
enforcement costs, or leads to unconsummated transactions. Guiso, Sapienza & Zingales,
L. (2004) measure how trust and the development of financial markets are related in Italy
using a large panel survey, and find that low-social-capital provinces use fewer checks
and hold more cash. Similarly, Coupé (2011) looks at representative survey data from the
FINREP Ukraine survey, and reports that more than half of the samples save in cash at
home, with those who self-report as having low trust in banks being 10–15 percentage
points more likely to keep all their savings in cash.
Dupas & Robinson (2013)conducted a study in western Kenya, with a sample of 1565
unbanked individuals, they found reasonable take-up (62 percent) but lower active usage
(18percent) of free savings accounts. A qualitative survey on a subset of study
participants, found that low trust in the financial institutions is often cited as a key
concern that deters people in their sample from using formal bank accounts. As many as
15–37 percent of those who did not open or use the free savings account with one of the
two participating banks cited unreliability as a concern, and 7–24 percent mentioned risk
of embezzlement by the given bank as a concern. In contrast, Miranda, Seira, &
Sharma(2008) reports on a survey of 4765 Mexican banked and unbanked households, of
whom 2182 households did not have a bank account. When asked to pick their main
12
reason for not having a bank account from a list of options, only 2% of the unbanked
sample mentioned not having confidence in the institution as opposed to 89% who stated
they did not have enough money and 6% who said that they did not want an account.
There is a sizeable behavioral economics literature that varies trust experimentally in lab
settings, to evaluate the impact of trust on risk-taking (Karlan, 2007); (Schechter, 2007).
But to our knowledge, there are no randomized field evaluations that directly tackle the
issue of low trust in formal banking services as a barrier to saving. The challenge, from an
experimental perspective, is clear: one cannot easily randomly assign trust. One could, for
example, randomize the marketing of a bank, in which some advertisements focus on why
the bank should be trusted.
While many factors can be expected to affect consumer trust in a financial institution—
reputation, brand, product quality, price, etc.—governments are thought to play a central
role in building and maintaining client trust in all formal financial institutions and in
facilitating contractual exchanges between strangers who are not bound by pre-existing
social ties or reciprocal norms (La Porta, Lopez-de-Silanes, & Shleifer, 2002). Through
prudential regulation, central banks aim to assure investors that a country’s retail banks
and other regulated financial institutions will honor their deposits. Such prudential
regulation have two basic goals: to protect small depositors in particular from losing their
savings, and to ensure trust in the financial system as a whole and preserve the stability of
the economy (Conroy, 2000).Banking institutions fall into two main regulatory
categories: those granted full banking licenses, i.e. allowed to accept deposits from clients
and on-lend funds and those with a non-banking financial institution license (often
covering most microfinance institutions) that allows them to lend to clients but restricts
them from accepting deposits and/or from on-lending funds. The former are always
regulated by the central bank while the latter institutions are sometimes overseen by a
separate regulator and subject to less oversight given their limited scope. Small banks
may also escape some regulatory scrutiny, given lack of systemic importance, and the
difficulties of monitoring compliance forensically with data.
According to Christen & Rosenberg (2000) and Conroy( 2000) there appears to be a
general tension between prudential regulation and access/outreach objectives: the bigger
institutions are easier to regulate with limited resources, but limiting the ability of smaller
institutions to offer saving products presumably forgoes some access and innovation. The
recent policy discourse on “proportional” regulation might offer a way out, but that notion
13
is still very vague and needs to find actionable guidelines. This is clearly an area that
deserves more systematic inquiry and experimentation to identify the most promising
ways to improve consumer confidence and trust in the formal banking sector.
2.2.7 Motive for Future Purchase and Individuals Future Expectation
According to Keynes (1937) people save for the following reasons to build up a reserve
against unforeseen contingencies, to provide for an anticipated future relationship
between the income and the needs of the individual, to enjoy interest and appreciation, to
enjoy gradually increasing expenditure, to enjoy a sense of independence, bequeath a
fortune, to satisfy pure miserliness and to accumulated deposits to buy houses, cars and
other durables which is the most common.
Saving money is rooted in the psychological need and desire to be financially stable and
having the ability to purchase and fulfill one’s needs or desires. The security that
accompanies saving is one of the motivational principles of behind saving money for the
things one wants and needs. Various reasons for saving money motivate individuals to
make certain that money is budgeted accordingly, and savings are kept earmarked for use
later.
Home ownership is one of the motivations for saving money stemming from the desire to
become a homeowner. The cost associated with purchasing a home is usually high;
requiring you to save to help ensure home ownership can become a reality. The down
payment required to purchase a home can run to more than 20% of the selling price which
in some cases is usually high.(Porpiglia, Martha, & Ziegelmeyer, 2017).
Another reason is usually retirement. The desire to retire with enough money saved up is
a motivation for many people's savings. You need to save money to ensure that once you
stop working, you will have enough money in the bank or in investments to fund your
lifestyle for the rest of your life. Many people are motivated to save money for retirement
so that they can afford the things they both want and need(Luu, Lowe, Butler, & Byrne,
2017).
Travel and luxury are motivations for some people. Motivation for saving comes because
they want nice things. Not everyone craves luxury items or travel. However, for those
who enjoy such things, saving money may be a necessity. Planning for a big trip or a
large purchase, such as a boat or car, can provide the motivation one needs to be
disciplined in terms of saving money (Freshman&Clingen, 2017)
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Older parents demonstrate a strong desire to help their children and grandchildren through
important or difficult transitions to "build or rebuild secure lives and futures". Those with
young children are motivated by the prospect of that child eventually going off to college.
The rising cost of a college education drives people to save money so that a child can
attend college without having to worry about finances. Some parents also are motivated to
save for other things for their children such as a car, braces, a wedding or helping grown
children buy a home.(Ploeg, Campbell, Denton, Joshi, & Davies, 2004)
Unexpected events and situations can arise at any time. Situations such a as a job loss,
sickness, long-term illness and even economic issues can all cause a financial shift.
Having a healthy savings account at the ready can help you get through challenging
financial situations and health situations(Smith, 1999).
2.3 Challenges facing Kenyan footballers when Saving
2.3.1 Mismanaged Clubs, Corruption and Seasonality of Wages
.Rintaugu, Mwisukha and Onywera (2012) state that sport administration in Kenya
suffers from multiple problems including weak financial management and leadership
along with poor governance. Football clubs have managers who don’t follow their
responsibilities and embezzle funds due to greed. There has been tremendous instability
in the governance of football in Kenya with frequent squabbles and even dissolutions of
the governing body of Kenyan football. Stakeholders within this sector point to lack of
coherent management for the issues that bedevil Kenyan football(Gichangi, 2004).
In 2000-04 the total sponsorship of the Kenyan Premier Leagues was only around Ksh 15
million annually (US$ 200,000). Along with the World Bank and IMF, KFF officials
believe strongly in trickle-down economics. In development aid, what reaches the poor is
only a trickle. In Kenyan football, what reaches the clubs, coaches, players and referees is
also only a trickle. The rest is corruptly diverted to private pockets and cripples the sport
according to Munro (2005).
Khumalo (2013) argues that bad governance within football is a universal problem which
begins at the very top at FIFA (Fédération Internationale de Football Association). The
scandals, greed and corruption cases across the world over the past years point to a
world football system crippled by controversy. Football governance in Africa is based
on national associations which in turn report to the Confederation of African
Football (CAF) which is the continental footballing body. National associations are
15
independent bodies whose leaders are chosen by a few members involved in football
administration. In most countries such as Zimbabwe and Nigeria the majority of
football fans are not involved in this process and in most countries only those
who have been involved in football administration for a number of years are allowed to
run for office. As such the fans have no way of holding administrators accountable.
Administrators only answer to FIFA or CAF which are not involved in everyday
happenings of footballing nations. There is no upward accountability which leaves
African fans alienated from the footballing fraternity. This has serious implications in the
commercialization of the game since it is the same fans that are required to part
with their money to finance football on the continent and failure to invest in youth
programs (Khumalo, 2013).
The Fifpro Global Employment Report paints a picture of an industry fraught with
instability and, in an alarming number of cases, insufficient regulation, with basic
employment standards not being met. Among its findings is 41% of players have
experienced delayed salary payments over the last two seasons and the median net
monthly income of those surveyed is between $1,000 (£804) and $2,000 a month. The
issue of late payment was key in the report. It stated that Fifa rules allow clubs to pay
players up to 90 days after the due date; beyond this point a player is permitted to
unilaterally breach his contract although the constraints of the transfer window often
make this impractical. The report found 78% of late payments fell within that three-month
window; the remainder, which accounted for nearly one in 10 of the players surveyed,
were forced to wait longer(The Fifpro Global Employment Report, 2016).Wages in the
Kenyan football context seem to follow the same trend; they vary and footballers do not
get the same wage as this is determined by the way you negotiated your contract based on
your skill level and experience. At times the wage is low and becomes hard to save since
it can only cater for ones needs and is not enough for one to save. Therefore,
mismanagement added to corruption and the low and seasonal wages footballers get has
quite some adverse effects on the footballer’s capacities to save.
2.3.3 Financial literacy levels and Academic Education Levels of Footballers
Lusardi, Mitchell (2007) examined how financial literacy impacts people’s preparedness
for their retirement. Using data of elderly individuals from the Health and Retirement
Survey in the US, the authors investigate whether financially literate people are more
likely to plan for retirement, and whether planning have an impact on retirement wealth.
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Results of the study found that financial literacy increases the likelihood of planning for
retirement and that people who plan for retirement have higher levels of wealth compared
to people who do not plan. They show that financial literacy, by its significant effect on
planning, indirectly impacts household saving behavior. Research has shown that people
with higher knowledge of finance are more capable of preparing themselves for
retirement through better saving and insurance plans. Clark and Madeleine (2008) showed
that financial knowledge and saving programs can be very effective in overcoming the
decrease in saving. However, the exact process that shows how learning changes the level
of saving and investment decisions is not clear (Bernheim, Garret, & Maki, 2001).
Osoro(2014)states that many Kenyan footballers lack even a basic education, and this
ends up hurting them in the long run. This has a major effect because many footballerssome with potential to play in Europe- get injured, but do not know who will take care of
their medical bills. Most footballers do not sign contracts- they just verbally accept to
play for clubs- so when they get injured the club does not cover them at all. They do not
know anything about the legal process, they know nothing about how to navigate and
receive a favorable contract, and so a minor injury can end their bright careers. With more
educated footballers, they could make better decisions for themselves and ensure that they
are getting the proper coverage, and can defend themselves legally. He further states that
the Kenya Secondary School Association that runs the secondary school games is one
culprit that encourages players not to study. They allow many players to forge certificates
and participate in the games. This is aided by the schools that hire club players to play for
them without offering them education. This is a system if not checked will go on
producing players who have not seen the inside of a classroom. Ojuang adds to this by
highlighting how there are schools where these students never see the inside of a
classroom. He highlights how they wake up in the morning and head directly to the pitch
for practice. They are given special diet and as such they train the whole year around
while others students learn. One shudders to think about what happens to them after a
decade in different schools (Ojuang, 2016).
They end up graduating High School and joining football teams with no basic high school
education.The case of some players like Harold Ndege highlight the importance of both
academic literacy and financial literacy. An article written by Kinyanjui (2017) states that
Ndege, born on 12th June 1980, started formal education at the Nairobi River Primary
School in Buru Buru and later joined Nairobi School for his O-Level where he spent just
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three years (1995 -1998) before leaving to finish up at Chianda High School in 1999.He
joined Tusker in 1997 as a rookie but officially signed a contract in 1999 after clearing
High School. His football career blossomed and just one year after joining the club he
was called up to Kenya B National team where he featured against Zambia and
Zimbabwe in the COMESA Cup,
the team losing both games; 0-4 and 0-3
respectively. In 2001, the coach led a restructuring of the playing unit at Tusker FC and
the likes of the late Albert Njeru, Kevin Malumbe amongst others were released. Ndege
survived the chop but this affected him mentally. The following year Ndege quit the team
and boarded a plane to India to join Karnatak University for his undergraduate studies.
Ndege graduated with a Bachelor of Commerce Degree - Finance Option in 2005 and
came back to Kenya but went back to join the Institute of Chartered Financial Analysts
University in 2011 for his MBA specializing in finance. He came after a year and worked
as a Financial Consultant before joining Old Mutual as a Financial Advisor in 2014. He
later moved to his current job as the County Director of Safe Promotion Funds in Kisumu.
Besides that, he also works part-time as a Sports Consultant as well as Football Analyst
with a weekly football column with the Standard Group’s Nairobian and occasional
appearances on KTN’s Zilizala Viwanjani and Morning Express Sports. This clearly
illustrates the value of a good academic and financial education in a footballer’s life.
2.3.4 Inflation/ Cost of Living
When the average person thinks about inflation, the first thing that comes to mind is an
increase in the Cost of Living i.e. the items they purchase regularly keep getting more and
more expensive. While this is true, an even greater concern regarding inflation is its
impact on savings and financial planning (Von Ungern-Sternberg, 1981) . Inflation hurts
consumer buying power, because increased costs mean spending more to purchase the
same items. What you put into a savings account today, at current interest rates (which
are approximately 1% APR at the time of this writing), will only buy half as much in 20
years as it does now if you figure the inflation rate to be an average of 3.75% each year.
In other words, a basic savings account will not be able to keep up with inflation at
current interest rates. Ultimately, your savings account will provide a negative return on
your investment if inflation continues at a level greater than the return on your
investment, meaning your money will lose its value even though you aren’t spending it.
To make matters worse you will be charged taxes on the interest or capital gains even
though your money is losing value.
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Inflation also makes retirement planning more difficult because the amount needed to live
after retirement continues to rise and the level of inflation is uncertain. After adjusting for
the cost of inflation as well as the trend of people living longer, one soon realizes that
saving for retirement is an expensive feat(Gramlich, 1996). The old standby goal of
saving a million dollars for retirement becomes a laughably low goal in light of inflation.
Consider that if you have a $1 million dollar retirement nest egg earning 6% with 3%
inflation and you spend $150,000 per year your nest egg will be depleted in 7 years. If
you retire at 65 that means you are broke by 72.
If you reduce your expenditures to $100,000 per year your nest egg will be gone in 11
years. On the other hand if you reduce your living expenses to $50,000 your $1 million
retirement fund will last 30 years. Assuming that you retire at 65 and don’t have any
major medical expenses and no major set-backs from stock market losses, that nest egg
will last until you are 95. Remember this is liquid assets it doesn’t include money you
can’t spend like the value of your house (unless you plan on taking out a “reverse
mortgage”). Inflation means more than a rise in the price of bread or gasoline; it impacts
savings from several directions. (How Inflation affects your savings - Reduced buying
power, 2012)
2.3.5 Loans and Cheap Credit
Since microcredit started to appear on a significant scale 25 years ago, there has been a
continual debate about its welfare effects on low-income entrepreneurs: is it as
beneficial as many claim – creating opportunities for increased income generation – or
does it tend to create a debt-trap that in the end serves to impoverish the borrowers?
(Besley, 1995). The critics claim that what is needed is not more credit and debt,
but rather savings services. Standard models of saving behavior indicate that total
savings will fall as a result of improved access to credit. Not only will the
precautionary saving motive be mitigated, but accumulation of savings for investment,
household purchases or social events becomes less important. (Browning & Crossley,
2001)
2.4
Solutions to These Challenges
2.4.1 Form Chama’s (Self-help groups)
A Chama is an informal cooperative society that is normally used to pool and invest
savings by people in East Africa, and particularly Kenya. The chama phenomenon is also
19
referred to as "micro-savings groups". "Chama" (also spelled Kyama by certain tribes) is
the Kiswahili word for "group" or "body". The chama phenomenon arose out of the idea
of harambee, which means "all together", in the late 1980s and 1990s. It can also be
referred to as a Self-Help Group (SHG). It is registered or unregistered group of
entrepreneurs with homogenous social and economic background, voluntarily coming
together to save small amounts on a regular basis (Gupta & Singh, 2016).
The group members use collective wisdom and peer pressure to ensure proper end use of
credit and timely repayment is done. SHG’s are participative and democratic in character.
They follow the cooperatives principles of collective endeavor for individual and
community development by overcoming the deeply entrenched social bottlenecks and
economic hurdles. There should be true democratic culture in which all members must
participate actively in decision making process. Collective responsibility, leadership with
fixed tenure. Mutual trust and cooperative philosophy should be driving force for SHG.
(Kisera & Muturi, 2015)
Chama’s act as a way of saving declares Mr. Makhulo a financial consultant with MGK
consultants, “The minute you contribute Kshs 2000 at the beginning of the month you are
supposed to get a certain amount later, the total sum being the sum of money you
contributed multiplied by the number of members in the Chama. It’s a great way of
saving, especially for those without the discipline of saving.” He also advises, “For a
Chama to be a source of benefit, members should not receive their share and store it. A
focused person should put their money where it can multiply.” He also advices that,
before investing one should consider the risk factor, he is also of the opinion that one
should not bank such money as the bank’s interest is insignificant. Yes, a Chama is a
great informal way of harnessing capital to bring about self-improvement and achieve
financial success. (Mukunya, 2014)
2.4.2 Educational and Sensitization Forums
Understanding money, banking, credit, and how best to use financial assets to build
wealth is an important skill for all families, including the low-income and disadvantaged.
Financial literacy can provide the knowledge necessary to manage household budgets,
initiate savings plans, manage debt, and make strategic investment decisions. Education
provides consumers the necessary tools to make sound financial decisions (Lusardi,
Mitchell, &Curto, 2010). With these basic financial planning skills, it is easierto meet
20
ongoing obligations as well as to maximize longer-term financial security. Financial
literacy training can also inform consumers about bank services designed to build
personal credit and help them decide which options best meet their specific needs.
Financial literacy training should be provided by a variety of national and local entities
including community-based organizations, community credit unions, and the Cooperative
Extension Service. National organizations and schools should also offer introductory
courses on savings, checking, and credit to teens.
Women have the capacity to save. Studies have implied that women are more responsive
to savings solutions that reduce temptation spending and other saving barriers. However,
a key contributing factor to their inability to meet their savings goals are the absence of
cleverly marketed and carefully tested financial products(K, M., & Bhattacharya, 2013).
Many researchers are conducting social experiments that train, counsel, or motivate
women to make better financial decisions. One such study found women who were
exposed to financial education trainings were more likely to save than those who were
not(Bernheim, Garret, & Maki, 2001). At the same time, financial education is not
enough if women do not have access to saving products. The same could and should be
done to footballers to increase their financial literacy levels and their ability to save.
2.4.3 Find other Sources of Income
Nowadays a single source of income is not enough to relay on. This is because of the
financial risks involved with relying on a job for all your incoming cash, it is critical to
consider having at least one additional source of income. To meet the rising costs of
living people are building multiple streams of income. It has become a necessity. If the
high rates of unemployment and mounting job losses teach us anything, it is that nobody's
job is safe. Unfortunately for most people, their only source of income is from their job,
which can be a risky way to live. Some couples may be more fortunate and have a spouse
bringing in money each month, but they are still relying on a job for their livelihood.
(Moolanomy, 2010)
2.4.4 Interest Earnings on Savings
Interest rates determine the amount of interest payments that savers will receive on their
deposits. An increase in interest rates will make saving more attractive and should
encourage saving. A cut in interest rates will reduce the rewards of saving and will tend to
discourage saving. (Pettinger, 2013)Income and substitution effect of higher interest rates
21
affect savings in that if interest rates fall, the reward from saving falls. It becomes
relatively more attractive to hold cash and / or spend. This is the substitution effect – with
lower interest rates, consumers substitute saving for spending. However, if interest rates
fall, savers see a decline in income because they receive lower income payments(Molho,
1986). A pensioner relying on interest payments from saving may feel he needs to save
more in order to maintain the income from savings. Usually, the substitution effect
dominates. Lower interest rates make saving less attractive. But, for some, the income
effect may dominate, and people may respond to lower interest rates by saving more in
order to maintain their standard of living. Alternatively, a lower interest rate may
encourage other forms of saving and investment. With very low bank rates, it has
encouraged people to look for better yields in the stock market. This is one reason why
the stock market did well in the great recession of 2008-2013 – savers have been buying
shares to get a better rate of interest rate than they can in a bank and on bonds (Donald,
2014).
2.4.5 Financial institutions and banks should have tailor made products to
encourage them to save and creation of Saving Schemes.
Small savings schemes are designed to provide safe and attractive investment options to
the public and at the same time to mobilize resources for development(Morduch,
1999).When speaking of a life well lived, financial independence, as exhibited by money
conscious living and good saving habits, is one of the fundamental expectations. We all
want to save some monies for a rainy day and feel comfortable in the knowledge that no
unforeseen financial contingency can deviate us from our chosen way of life.
Modern banking is a big supporter of saving schemes and encourages patrons to open
clever investment instruments that are intended to ‘horde’ sums of money for a specified
duration, earn periodic interest and offer said investors the peace of mind through the
unfailing realization that such ‘parked’ monies are working 24x7 for them, aggressively
growing and completely protected. They have the following advantages:
Readily Available- The government, through both the public and private sector banking
system, offers a multitude of saving schemes that are easy to enroll with and are perfectly
suited for the strategic as well as casual investor. Their simplicity and abundance makes
them a much preferred savings option (Saving Schemes, 2016).
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Long Term Planning- Quite opposite to the run and burn concept, long term savings are
focused on a time in the future when abundant monies will be required to comply with an
expected requirement. Retirement, marriage of a son/daughter, long awaited foreign trip,
etc. demand strategic, long term financial planning(Saving Schemes, 2016).
Wide Ranges of Products-saving schemes include a plethora of different products that
are intended for a wide segment of potential customers. The choices are many and super
specialized.
Simple to Enroll- Limited documentation, clearly defined procedures and the Indian
Government’s backing ensures that these saving schemes are simple to opt for and safe to
be locked onto. (Saving Schemes, 2016)
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CHAPTER THREE
3.0 RESEARCH METHODOLOGY
3.1 Introduction
The previous chapter reviewed literature on the factors influencing Kenyan footballers’
investment decisions. This chapter describes the research methodology adopted. This
involves the identification and selection of the most appropriate approach. The process
includes a description of the population to be studied, the sample size and a description of
how data was collected and analyzed. Finally, the researcher gives a summary of the
entire process, from the introduction to the final stage of data analysis.
3.2 Research Design
In this study, descriptive research design was adopted. Descriptive research involves
measuring a set of variables as they exist naturally (Gravetter & Forzano, 2009). It is
designed to provide in-depth information about the characteristics of subjects within a
particular field of study, thus it can help identify relationships between variables (Houser,
2011). This design offers the researcher a profile to describe relevant aspects of the
phenomena of interest for an individual, organization or other perspectives (Sekran, 2003)
In this study, the dependent variable was the ability of football players to save, whereas
the independent variables were: age of the player, the income level, family background
factors, the length of contract, the level of education, presence of peer pressure factors,
knowledge of saving schemes, level of trust in financial institutions, the motive for future
savings, rate of inflation, the individuals future income expectations, the increase in
availability of borrowing opportunities, the rate of taxation of savings, the real interest
rate on savings deposits, the availability of credit, and the players expectations of future
income and job security.
3.3 Population and Sampling Design
3.3.1 Population
A population is the total set of elements about which some inferences may be drawn after
a scientific inquiry (Saunders, Lewis, & Thornhill, 2009).In this case, population
elements refer to the subjects on which the measurement is being taken (Schindler &
Cooper, 2005). In this study, the target population of the study is the players under
contract with the Kenya Premier League teams in Nairobi for the 2015/2016 season.
24
There were 16 teams registered for the mentioned season, with each team having a
minimum of 11 starting players giving an approximate population of 176 players.
3.3.2 Sampling Design
According to (Kumar, 2005)sampling “is the process of selecting a few from a bigger
group to become the basis for estimating or predicting the prevalence of an unknown
piece of information, situation, or outcome regarding the bigger group.” Sampling is
significant because collecting data from the whole population is far too costly (Pagano,
2006)
3.3.2.1 Sampling Frame
Saunders et al. (2009) defines the sampling frame as the complete list of all the cases in
the population from which a probability sample is drawn. In this study, the sampling
frame consists of all the Kenyan Premier League football clubs that are based in Nairobi.
3.3.2.2 Sampling Technique
Due to the small size of the population used in the study, a simple random sample
technique was used. In a simple random sample ‘’ a researcher selects a certain element
and the necessary variables are measured’’ ( Barreiro & Albandoz, 2001).
3.3.2.3 Sample Size
A sample size is a section of a part that represents the whole ( (Denscombe, 2003);
Cooper and Schindler, 2005). The study included the eight football clubs based in Nairobi
that participated in the Kenyan Premier League in 2015/2016. Data was collected from
the four main positions from each respective club, namely: the Goalkeeper, the
Midfielder, the Striker, and the Defender. Research Methods scholars argue that a
minimum of 30 cases is sufficient for empirical analysis ( (Mugenda & Mugenda, 2003);
Denscombe, 2003). A sample of 88 players was used by a random sample of 8 teams
located in Nairobi.
3.4 Data Collection Methods
Data was collected using a structured questionnaire. Saunders et al. (2009) defines a
questionnaire as the general term including all data collection techniques in which each
person is asked to answer the same set of questions in a predetermined order. The
questionnaire was structured using measurement variables such as nominal, ordinal,
interval and ratio scales which are the most widely used classification of measurement
25
(Kothari, 2004). The questions were both open-ended and closed-ended to make coding
of the answers possible.
A Likert scale was used to increase the degree of flexibility when the respondents where
answering the questionnaire. According to (Stangor, 2010), “a Likert scale consists of a
series of items that indicate agreement or disagreement with the issue that is to be
measured, each with a set of responses on which the respondents indicate their opinions.”
Each item is a standalone statement that expresses an opinion about a subject (McNabb,
2008). There are a number of advantages associated with using a questionnaire as a data
collection tool. These include: its efficiency in collecting responses from large samples,
its uniformity and structure, and for closed-ended questions, the possibility of using the
data for quantitative analysis.
The questionnaire comprised of four sections: section I asked questions that related to the
general information of a player, section 2 which relates to the factors that influence the
saving decisions of the players, section 3 relates to the challenges facing saving decisions
while section 4 relates to the solutions to challenges facing saving decisions. Thus,
section one comprised of questions seeking to establish the age of the player, gender,
position played, level of professional experience in years, level of education, marital
status, presence of club bonuses, length of contract, presence of savings, mode of saving,
savings scheme, and the impact of the length of contract on ability to save. The other
sections contained nominal statements about factors that influence saving decisions
challenges facing saving decisions solutions to challenges facing saving decisions.
3.5 Research Procedures
The research instrument was administered to 3 players of at least 2 teams in the Kenya
Premier League based in Nairobi to gauge its appropriateness. The purpose of this was to
pre-test the questionnaire for qualities such as completeness, redundancy, inclusivity,
friendliness or sensitivity to the respondent, and relevance. According to (Stangor, 2010),
“pilot testing involves trying out a questionnaire on a small group of individuals to get an
idea of how they react to it before the final version is created”. The researcher mainly
targeted players who were not very experienced in their football work experience. This
was because the targeted players were expected to be relatively more accessible and more
willing to help than the more experienced players in the teams. Since they operate on
fixed training schedule, they were more open to inquiries on issues that would otherwise
26
be considered sensitive or confidential as well as having adequate time to answer the
questionnaire. Improvements and revisions were made to the questionnaire based on the
questionnaires that were issued. This guaranteed that the final version was capable of
obtaining the quality of information necessary for the researcher to make appropriate
conclusions and recommendations.
The final questionnaire was administered by the researcher and two research assistants.
To encourage participation and maximize the response rate, the researcher visited each
club personally and explained the purpose and importance of the study to the players. The
benefit of the study to the respondents, the team officials, and the wider society was also
explained. The researcher also assured the respondents of the confidentiality with their
responses.
To ensure that data collection was done accurately, the researcher trained the research
assistants on appropriate procedures. These included strategies to encourage the
respondent to cooperate, and avoiding bias such as encouraging certain responses from
respondents. By their nature, physically administered questionnaires encourage high
response rates because they are conducted in the presence of the researcher. After the
questionnaire was completed by the respondent, the researcher and the assistant
conducted a debriefing session. This was done to ensure that the details had been
adequately recorded.
3.6 Data Analysis Methods
Data analysis is the process of sifting through data and piecing together numerical
evidence about the social world (Marsh & Elliot, 2009). Descriptive statistics were used
to analyze and interpret the data. According to Cooper and Schindler (2003), this
approach mainly applies measures of central tendency to analyze data. The most
commonly used measures are the Mean, Mode and Median. The Independent sample ttest was used to compare the mean scores between the football players who were saving
and those that did not. A t-test is used to calculate group differences by examining the
means and variations of both groups (Andrew, Pedersen, & McEvoy, 2011). The findings
were presented in figures and tables.
27
3.7 Chapter Summary
This chapter described the methodology that guided the research work. The research
design, population and sampling design, data collection methods, research procedures and
data analysis methods were all discussed. After data collection, the next chapter presents
the analysis of findings. Chapter four looked into the results and findings of the research
conducted.
28
CHAPTER FOUR
4.0 RESULTS AND FINDINGS
4.1 Introduction
This chapter presents the findings of the study.
The purpose of this study was to
determine the factors influencing saving decisions of professional football players in the
Kenyan Premier League. A descriptive analysis of the general information is first
presented. The rest of the chapter is thematically presented based on the research
questions. Thus, the second part of the chapter presents the factors influencing savings
decisions. The third section of the chapter analyzes the challenges facing Kenyan
footballers when saving. The last section analyzes the solutions to the challenges facing
Kenyan footballers when saving. A summary of the major findings is presented at the end
of the chapter.
4.2 General Information
The general information presented in this section includes age, gender ,position in the
team, years of playing experience, level of education, marital status, presence of bonuses
by clubs, length of contract, whether they save or not, medium of saving ,presence of a
saving scheme and whether increased contract would help them save more.
4.2.1 Response rate
This study had a sample size of 88 respondents from the 8 different football teams located
in Nairobi of this sample size 64 respondents gave a response and 24 did not. This
represents a response rate of 72% and a non-response rate of 28% as shown in table 4.1.
Table 4.1 Response Rate
Questionnaires
Number
Percentage
Filled and collected
64
72%
Non Responded
24
28%
Total
88
100
29
4.2.2 Age
From the findings, the variable age had a standard deviation of 0.819 and the respondents
with the highest proportion was age group 21-25 at 50%, this was followed by age group
26-30 at 25 %, 16 -20 at 21.9%, 31-35 and above 35 both had 1.6% each as shown in
figure 4.1 below.
60
50
50
40
Percentage of
Respondents 30
25
21.9
20
10
1.6
1.6
31 - 35
above 35
0
16 - 20
21 - 25
26 - 30
Figure 4.1 Age of Respondents.
4.2.3 Gender
The respondents with the highest proportion were male 68.8%, female had a proportion of
31.3% as shown in figure 4.2 below.
Female
31%
Male
69%
Figure 4. 2 Gender Representation
30
4.2.4 Position in the team
The study sought to establish the position the respondents held in their respective clubs.
Table 4.2 shows that Midfielders were the majority at 43.8%, followed by Defenders
31.3%, Strikers were at 18.8% and lastly, Goal Keepers 6.3%
Table 4.2 Position in The Team
Distribution
Position in team
Frequency
Percent
Goalkeeper
4
6.3
Defender
20
31.3
Midfielder
28
43.8
Striker
12
18.8
Total
64
100
4.2.5 Years of playing experience
From the findings the variable years of playing experience was analyzed and found that
43.8% of the respondent’s was 0-2 years , 20.3% were 3-5 years, 17.2% were 6-8 years,
17.2% had more than 9 years and 1.6% was missing data as shown in the figure 4.3
below.
missing data
No. Of Years
1.6
more than 9 years
17.2
6-8
17.2
3-5
20.3
0-2
43.8
0
10
20
30
Percentage
Figure 4.3 Years of Playing Experience
31
40
50
4.2.6 Level of Education
The respondents with the highest proportion were degree holders who had 40.6%,
diploma holders had 37.5%, High School certificate holders had 20.3%, while Primary
School Certificate had 1.6% as shown in figure 4.4
45
40
35
40.6
37.5
30
Percentage 25
20
15
20.3
10
5
1.6
0
High school
Certificate
College Diploma
University Degree
Primary School
Certificate
Level Of Education
Figure 4.4 Level of Education
4.2.7 Marital status
From the findings, the variable marital status showed that the highest proportion were
singles at 82.8%, married 15.6%, while missing data had a proportion of 1.6% as shown
in figure 4.5 below
90
80
70
60
50
Percentage
40
30
20
10
0
82.8
15.6
1.6
Single
Married
Marital Status
Figure 4.5 Marital Status
32
Missing
4.2.8 Presence of bonuses by clubs
From the findings,59% of the respondents said no their clubs don’t pay bonuses, while
38% said yes their clubs pay bonuses and 3% was missing data as shown in the figure 4.6
below.
Missing
3%
Yes
38%
No
59%
Figure 4.6 Bonuses
4.2.9 Length of Playing Contract
On analyzing the variable length of Playing Contract it was found that 70.3% of the
respondents had 0-2 years, 14.1% had 3-5 years, 1.6% had 6-8 years, 7.8% had more than
9 years and 6.3% were missing as shown in the figure 4.7 below.
Years
Missing
6.3
more than 9 years
7.8
6-8 1.6
3-5
14.1
0-2
70.3
0
10
20
30
40
50
Percentage
Figure 4.7 Length of Contract in years
33
60
70
80
4.2.10 Presence of Savings
From the findings, the variable presence of savings showed that 84.4% of the respondents
save, 14.1% do not save, while 1% is missing as shown in the figure 4.8 below.
No
14%
missing
2%
Yes
84%
Figure 4.8 Savings
4.2.11 Medium of Saving
From the findings the variable medium of saving 48.4% of the respondents use savings
accounts, 18.8% use more than 1 saving scheme, 12.5% use M – Shwari accounts, 7.8%
is missing data, 3.1% save in Chamas and 3.1% use airtel money as shown in the figure
4.9 below.
Missing
8%
Chama
3%
More than 1
savings schemes
19%
Savings
Account
48%
Any other
6%
Airtel Money
3%
M – Shwari
13%
Figure 4.9 Medium of Saving
34
4.2.12 Presence of a saving scheme
From the findings, the variable presence of a saving scheme showed that 71.9% of the
respondent’s clubs did not have savings schemes and 23.4% of the respondent’s clubs
have saving schemes and 4.7% as shown in the figure 4.10 below.
Missing
5%
Yes
23%
No
72%
Figure 4.10 Presence of Saving Scheme
4.2.13 Increased Contract Period Would Help Them Save More.
From the findings, the variable increased contract period would help them save more, it
was found that 71.9% of the respondents answered yes, 25% answered no, while 3.1%
were missing as shown in the figure 4.11 below.
Missing
3%
No
25%
Yes
72%
Figure 4.11 Increased Contract period
35
4.3 Factors influencing savings decisions.
4.3.1. Level of education
The respondents were asked whether their level of education influences their savings
decisions, 28.1% of the respondents strongly agreed, while 34.4% agreed. However, 8%
of the respondents were neutral; while those who disagree were 7%, those who strongly
disagree were also 6% and 3% were missing these results are presented in Table 4.3
below
Table 4.3 Level of Education
Scale
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
Frequency
6
7
8
22
18
Missing
Total
3
64
Distribution
Percentage
9.4
10.9
12.5
34.4
28.1
4.7
100
4.3.2. Level of income
The respondents were asked whether the level of income influences the savings decisions,
34.4% of the respondents strongly agreed, while 35.9% agreed. However, 17.2% of the
respondents were neutral; while those who disagree were 7.8%, those who strongly
disagree were 0% these results are presented in Table 4.4 below
Table 4.4 Level of Income
Scale
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
Frequency
0
5
11
23
22
Missing
Total
3
64
Distribution
Percentage
0
7.8
17.2
35.9
34.4
4.7
100
36
4.3.3. Family background
The respondents were asked whether their family background would influence their
savings decisions, 16% of the respondents strongly agreed, while 25% agreed. However,
10% of the respondents were neutral; while those who disagree were 8%, those who
strongly disagree were also 2% these results are presented in Table 4.5 below
Table 4.5 Family Background
Scale
Distribution
Frequency
Percentage
Strongly Disagree
2
3.1
Disagree
8
12.5
Neutral
10
15.6
Agree
25
39.1
Strongly agree
16
25.0
Missing
3
4.7
Total
64
100
4.3.4. Peer pressure
The respondents were asked whether peer pressure would influence their savings
decisions, 12.5% of the respondents strongly agreed, while 29.7% agreed. However,
20.3% of the respondents were neutral; while those who disagree were 17.2%, those who
strongly disagree were 10.9% and missing were 9.4% these results are presented in Table
4.6 below
Table 4.6 Peer Pressure
Scale
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
Frequency
7
11
13
19
8
Missing
Total
6
64
Distribution
Percentage
10.9
17.2
20.3
29.7
12.5
9.4
100
37
4.3.5. Age
The respondents were asked whether their age would influence their savings decisions,
28.1% of the respondents strongly agreed, while 29.7% agreed. However, 20.3% of the
respondents were neutral; while those who disagree were 9.4%, those who strongly
disagree were also 7.8% and missing was 4.7% these results are presented in Table 4.7
below
Table 4.7 Age of Player
Scale
Frequency
5
6
13
19
18
3
64
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
Missing
Total
Distribution
Percentage
7.8
9.4
20.3
29.7
28.1
4.7
100
4.3.6. Knowledge about saving schemes
The respondents were asked whether their age would influence their savings decisions,
28.1% of the respondents strongly agreed, while 29.7% agreed. However, 20.3% of the
respondents were neutral; while those who disagree were 9.4%, those who strongly
disagree were also 7.8% and missing was 4.7% these results are presented in Table 4.8
below
Table 4.8 Knowledge of Savings Schemes
Scale
Distribution
Frequency
Percentage
Strongly Disagree
3
4.7
Disagree
5
9.4
Neutral
6
20.3
Agree
32
50.0
Strongly agree
14
21.9
Missing
4
6.3
Total
64
100
38
4.3.7. Trust in Financial Institutions
The respondents were asked whether their trust in financial institutions would influence
their savings decisions, 26.6% of the respondents strongly agreed, while 35.9% agreed.
However, 17.2% of the respondents were neutral; while those who disagree were 10.9%,
those who strongly disagree were also 1.6% and missing was 4.7% these results are
presented in Table 4.9
Table 4.9 Trust in Financial Institutions
Scale
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
Frequency
1
7
11
23
17
Missing
Total
5
64
Distribution
Percentage
1.6
10.9
17.2
35.9
26.6
7.8
100
4.3.8. Perception about the future
The variable perception about the future was evenly spread with a mean 3 and a standard
deviation of 0.958. The respondents were asked whether their perception about the future
would influence their savings decisions, 32.8% of the respondents strongly agreed, while
40.6% agreed. However, 15.6% of the respondents were neutral; while those who
disagree were 6.3%, those who strongly disagree were also 1.6% and missing was 3.1%
these results are presented in Table 4.10 below
Table 4.10 Perception about the future
Scale
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
Frequency
1
4
10
26
21
Missing
Total
2
64
Distribution
Percentage
1.6
6.3
15.6
40.6
32.8
3.1
100
39
4.3.9. Rate of inflation
The respondents were asked whether the rate of inflation would influence their savings
decisions, 28.1% of the respondents strongly agreed, while 29.7% agreed. However,
20.3% of the respondents were neutral; while those who disagree were 9.4%, those who
strongly disagree were also 7.8% and missing was 4.7% these results are presented in
Table 4.11 below
Table 4.11 Rate of Inflation
Scale
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
Frequency
5
9
13
19
18
Missing
Total
3
64
Distribution
Percentage
7.8
9.4
20.3
29.7
28.1
4.7
100
4.3.10. Increased availability of borrowing opportunities
The respondents were asked increased availability of borrowing opportunities would
influence their savings decisions, 21.9% of the respondents strongly agreed, while 35.9%
agreed. However, 20.3% of the respondents were neutral; while those who disagree were
10.9%, those who strongly disagree were also 4.7% and missing was 6.3% these results
are presented in Table 4.12 below
Table 4.12 Availability of Borrowing Facilities
Scale
Distribution
Frequency
Percentage
Strongly Disagree
3
4.7
Disagree
7
10.9
Neutral
13
20.3
Agree
23
35.9
Strongly agree
14
21.9
Missing
4
6.3
Total
64
100
40
4.3.11. Availability of credit facilities from shops and friends
The respondents were asked whether availability of credit facilities from shops and
friends would influence their savings decisions, 25% of the respondents strongly agreed,
while 29.7% agreed. However, 20.3% of the respondents were neutral; while those who
disagree were 15.6%, those who strongly disagree were also 4.7% and missing was 4.7%
these results are presented in Table 4.13 below
Table 4.13 Availability of Credit Facilities
Scale
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
Frequency
3
10
13
19
16
Missing
Total
3
64
Distribution
Percentage
4.7
15.6
20.3
29.7
25.0
4.7
100
4.3.12. Real Interest on Savings Deposits
The respondents were asked whether real interest on savings deposits would influence
their savings decisions, 21.9% of the respondents strongly agreed, while 34.4% agreed.
However, 23.4% of the respondents were neutral; while those who disagree were 7.8%,
those who strongly disagree were also 9.4% and missing was 3.1% these results are
presented in Table 4.14 below
Table 4.14 Real Interest on Savings Deposits
Scale
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
Frequency
6
5
15
22
14
Missing
Total
2
64
Distribution
Percentage
9.4
7.8
23.4
34.4
21.9
3.1
100
41
4.3.13. The length of contract
The respondents were asked whether the length of their contract would influence their
savings decisions, 25% of the respondents strongly agreed, while 40.6% agreed.
However, 7.8% of the respondents were neutral; while those who disagree were 15.6%,
those who strongly disagree were also 6.3% and missing was 4.7% these results are
presented in Table 4.15 below
Table 4.15 Length of Contract
Scale
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
Frequency
4
10
5
26
16
Missing
Total
3
64
Distribution
Percentage
6.3
15.6
7.8
40.6
25.0
4.7
100
4.4 Challenges facing Kenyan footballers when saving.
4.4.1. Fluctuating income
The respondents were asked whether fluctuating income challenges their savings
decisions, 21.9% of the respondents strongly agreed, while 40.6% agreed. However,
20.3% of the respondents were neutral; while those who disagree were 6.3%, those who
strongly disagree were also 6.3% and missing was 4.7% these results are presented in
Table 4.16 below
Table 4.16 Fluctuating Income
Scale
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
Frequency
4
4
13
26
14
Missing
Total
3
64
Distribution
Percentage
6.3
6.3
20.3
40.6
21.9
4.7
100
42
4.4.2. The management of clubs
The respondents were asked whether the management of the clubs would influence their
savings decisions, 15.6% of the respondents strongly agreed, while 42.2% agreed.
However, 18.8% of the respondents were neutral; while those who disagree were 10.9%,
those who strongly disagree were also 9.4% and missing was 3.1% these results are
presented in Table 4.17 below
Table 4.17 The Management of Clubs
Scale
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
Frequency
6
7
12
27
10
Missing
Total
2
64
Distribution
Percentage
9.4
10.9
18.8
42.2
15.6
3.1
100
4.4.3. Knowledge of finance
The respondents were asked whether their knowledge of finance would influence their
savings decisions, 25% of the respondents strongly agreed, while 42.2% agreed.
However, 15.6% of the respondents were neutral; while those who disagree were 4.7%,
those who strongly disagree were also 3.1% and missing was 4.7% these results are
presented in Table 4.18 below
Table 4.18 Knowledge of Finance
Scale
Distribution
Frequency
Percentage
Strongly Disagree
2
3.1
Disagree
3
4.7
Neutral
10
15.6
Agree
27
42.2
Strongly agree
16
25.0
Missing
6
9.4
Total
64
100
43
4.4.4. Family background
The respondents were asked whether their family background would influence their
savings decisions, 15.6% of the respondents strongly agreed, while 39.1% agreed.
However, 18.8% of the respondents were neutral; while those who disagree were 12.5%,
those who strongly disagree were also 7.8% and missing was 6.3% these results are
presented in Table 4.19 below
Table 4.19Family Background
Scale
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
Frequency
5
8
12
25
10
Missing
Total
4
64
Distribution
Percentage
7.8
12.5
18.8
39.1
15.6
6.3
100
4.4.5. The cost of living and day to day expenses
The respondents were asked whether the cost of living and day to day expenses
challenges their savings decisions, 21.9% of the respondents strongly agreed, while
29.7% agreed. However, 45.3% of the respondents were neutral; while those who
disagree were 9.4%, those who strongly disagree were also 3.1% and missing was 4.7%
these results are presented in Table 4.20
Table 4.20 Cost of Living
Scale
Distribution
Frequency
Percentage
Strongly Disagree
2
3.1
Disagree
6
9.4
Neutral
10
45.3
Agree
29
29.7
Strongly agree
14
21.9
Missing
3
4.7
Total
64
100
44
4.4.6. The availability of cheap credit
The respondents were asked whether the availability of cheap credit challenges their
savings decisions, 15.6% of the respondents strongly agreed, while 39.1% agreed.
However, 25% of the respondents were neutral; while those who disagree were 9.4%,
those who strongly disagree were also 4.7% and missing was 4.7% these results are
presented in Table 4.21 below
Table 4.21 Availability of Cheap Credit
Scale
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
Frequency
3
7
16
25
10
Missing
Total
3
64
Distribution
Percentage
4.7
10.9
25.0
39.1
15.6
4.7
100
4.5 Solutions to the challenges facing Kenyan footballers when saving.
4.5.1. Financial literacy programs.
The respondents were asked whether financial literacy programs would encourage them
to save, 23.4% of the respondents strongly agreed, while 51.6% agreed. However, 6.3%
of the respondents were neutral; while those who disagree were 7.8%, those who strongly
disagree were also 6.3% and missing was 4.7% these results are presented in Table 4.22
below
Table 4.22 Financial literacy
Scale
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
Frequency
4
5
4
33
15
Missing
Total
3
64
Distribution
Percentage
6.3
7.8
6.3
51.6
23.4
4.7
100
45
4.5.2. Other sources of income.
The respondents were asked whether other sources of income would increase their
savings, 20.3% of the respondents strongly agreed, while 45.3% agreed. However, 14.1%
of the respondents were neutral; while those who disagree were 9.4%, those who strongly
disagree were also 6.3% and missing was 4.7% these results are presented in Table 4.23
below
Table 4.23 Other Sources of Income
Scale
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
Missing
Total
Frequency
4
6
9
29
13
3
64
Distribution
Percentage
6.3
9.4
14.1
45.3
20.3
4.7
100
4.5.3. Tailor made products by banks.
The respondents were asked whether tailor made bank products would increase their
savings, 28.1% of the respondents strongly agreed, while 29.7% agreed. However, 20.3%
of the respondents were neutral; while those who disagree were 9.4%, those who strongly
disagree were also 7.8% and missing was 4.7% these results are presented in Table 4.24
below
Table 4.24Tailor Made Bank Products
Scale
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
Frequency
2
3
10
32
14
Missing
Total
3
64
Distribution
Percentage
7.8
9.4
20.3
29.7
28.1
4.7
100
46
4.5.4. Increase In Savings Interest Rates
The respondents were asked whether increase in savings interest rate would encourage
them to save more, 20.3% of the respondents strongly agreed, while 56.3% agreed.
However, 12.5% of the respondents were neutral; while those who disagree were 3.1%,
those who strongly disagree were 3.1% and missing was 4.7% these results are presented
in Table 4.25 below
Table 4.25 Increased Interest Rates
Scale
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
Frequency
2
2
8
36
13
Missing
Total
3
64
Distribution
Percentage
3.1
3.1
12.5
56.3
20.3
4.7
100
4.5.5. Use of a budget
The respondents were asked whether use of a budget to manage costs would influence
their savings decisions, 29.7% of the respondents strongly agreed, while 54.7% agreed.
However, 4.7% of the respondents were neutral; while those who disagree were 4.7%,
those who strongly disagree were also 1.6% and missing was 4.7% these results are
presented in Table 4.26 below
Table 4.26 Use of a Budget
Scale
Strongly Disagree
Disagree
Neutral
Agree
Strongly agree
Distribution
Frequency
1
3
3
35
19
Percentage
1.6
4.7
4.7
54.7
29.7
Missing
Total
3
64
4.7
100
47
4.6 Inferential Statistics
To find out whether there was any correlation between the different factors influencing
savings decisions and savings, a pearson correlation was done using savings as the
dependent variable against factors influencing savings decisions. The table 4.27 below
shows the degrees of correlation of the different variables affecting savings decisions.
Table 4.27 Degrees of correlation with the level of education
Level of Education
Level of Income
Family Background
Peer Pressure
Age of Player
Knowledge of Savings
Schemes
Trust in financial institutions
Perception about the future
Rate of Inflation
Availability of Borrowing
facilities
Availability of Credit
Facilities
Interest on savings
Length of contract
Tax
Pearson
Significant two tail
Pearson
Significant two tail
Pearson
Significant two tail
Pearson
Significant two tail
Pearson
Significant two tail
Pearson
Significant two tail
Pearson
Significant two tail
Pearson
Significant two tail
Pearson
Significant two tail
Pearson
Significant two tail
Pearson
Significant two tail
Pearson
Significant two tail
Pearson
Significant two tail
Pearson
Significant two tail
48
1.000
.
.283
.054
.310
.034
-.234
.113
.164
.270
.498
.000
.495
.000
.198
.182
.073
.625
.116
.436
.216
.145
.155
.299
-.080
.594
.005
.975
4.7 Chapter Summary
This chapter aimed to analyze and discuss the findings with regards to the objectives of
the study. The first section provides the demography of the study population along with
general information. The second section provides findings on the factors influencing
savings decisions, the third section provides specific challenges facing footballers when it
comes to saving the final section provided findings on the solutions to the challenges
facing the savings decisions of the footballers. Chapter 5 will provide the findings,
discussions, conclusions and recommendations.
49
CHAPTER FIVE
5.0 DISCUSSION, CONCLUSIONS AND RECOMMENDATIONS
5.1 Introduction
This chapter presents the summary and discussions on the findings of this study as well as
explanations and importance to related literature. First, a summary of the research is
presented. Discussions on the area of study will then follow according to the specific
objectives. Thereafter, conclusions are drawn based on the discussions. Finally, the
researcher makes recommendations for improvements and suggestions for further studies.
5.2 Summary
The purpose of this study was to establish the factors influencing the savings decisions
among Kenyan professional football players. The research was guided by the following
research questions: to establish the factors influencing savings decisions, to establish the
challenges faced by footballers when making savings decisions, and to determine
solutions to overcome these challenges. A descriptive research approach was utilized and
the information received was used to understand the characteristics associated with the
target population. The target population of this study was 88 players in the 8 football
teams located in Nairobi of which only 64 were collected. The data obtained was
analyzed through statistical Package for Social Sciences (SPSS) and excel. Both
qualitative and quantitative data was analyzed and the results presented in percentages,
means, standard deviations and frequencies.
The researcher distributed 88 questionnaires and only 64 were filled and returned, and on
analysis of the demographic factors, majority of the respondents were between the ages of
21-25, the dominant gender was male. Most of the respondents were midfielders, and
most of the respondents had 3-5 years of playing experience. Most of the respondents had
a university degree and most of them were single.
The first research question of the study was to establish the factors influencing savings
decisions. The findings established factors such as level of education, level of income,
family background, peer pressure, age, knowledge about saving schemes, trust in
financial institutions, perception about the future, rate of inflation, increased availability
of borrowing opportunities, availability of credit facilities from shops and friends, real
50
interest on savings deposits and the length of contract are some of the factors that
influenced the savings decisions.
The respondents were asked whether their level of education influences their savings
decisions, 28.1% of the respondents strongly agreed, while 34.4% agreed that their level
of education would influence their savings decision. 34.4% of the respondents strongly
agreed, while 35.9% agreed that their level of income would influence their savings
decisions. 39.1% agreed that their family background would influence their savings
decisions.29.7% strongly agreed that peer pressure would influence their savings
decisions. On the question of whether age would influence their savings decisions 28.1%
of the respondents strongly agreed, while 29.7% agreed.42.2% agreed knowledge about
saving schemes and trust in financial institutions would influence their savings decisions.
Perception about the future, rate of inflation, increased availability of credit from shops
and friends, real interest on savings deposits and length of their contracts would influence
their ability to save.
The second research question of the study was to establish the challenges facing Kenyan
footballers when saving. Fluctuating income, the management of clubs, knowledge of
finance, family background, the cost of living and day to day expenses and the
availability of cheap credit were noted to be some of the challenges facing their savings
decisions.
21.9% of the respondents strongly agreed, while 40.6% agreed fluctuating income
challenged their ability to save. 15.6% of the respondents strongly agreed, while 42.2%
agreed that the management of the clubs affected their ability to save too.25% of the
respondents strongly agreed, while 42.2% agreed that knowledge of finance played a role
in their ability to save15.6% of the respondents strongly agreed, while 39.1% agreed
family backgrounds would influence their ability to save combined with the cost of living
and day to day expenses. 15.6% of the respondents strongly agreed, while 39.1% agreed
cheap credit had an impact on their savings decisions.
The third research question of the study was to determine the solutions to the challenges.
Financial literacy programs, other sources of income, tailor made products by banks,
increase in savings interest rates and use of budgets are some of the immediate solutions
that were viable. 23.4% of the respondents strongly agreed, while 51.6% agreed financial
literacy programs should be offered by their clubs, and individually they should engage
51
the use of budgets to control and monitor their expenditure to increase their ability to
save. In addition, 28.1% of the respondents strongly agreed, while 29.7% agreed per the
findings agree that there is a need for tailor made products from financial institutions to
cater for their unique needs and situations. Most respondents agreed, 20.3% of the
respondents strongly agreed, while 56.3% agreed that higher interest rates on their
savings would encourage them to save more.
5.3 Discussions
5.3.1 Factors Influencing Savings Decisions
The findings established that most respondents believed that the level of education
influenced their savings decisions. According to Lusardi, Mitchell (2007a), for example,
show that people with a low level of education, females, African-Americans and
Hispanics, demonstrate low levels of financial literacy, which subsequently affect
financial decision-making. Results of the study found that these groups of respondents
fail to plan properly for their retirement period, have less participation in the stock
market, and have poor borrowing behavior, possibly due to lack of knowledge in basic
financial concepts (Lusardi, Mitchell, 2007a). Furthermore, Clark and Madeleine (2008)
showed that financial knowledge and saving programs can be very effective in
overcoming the decrease in saving. According to Hogarth (2002) more educated people
can manage their money in terms of insuring, investing, saving and budgeting .This
literature tends to agree with the research where the majority of the respondents agree that
their level of education influences their savings decisions.
On analyzing the variable level of income, it was revealed majority agreed that it does
influence their level of savings. This tends to agree with the findings according to Lusardi
and Browning (1996) which shows a very strong positive relationship between income
and saving. And that a large proportion of total saving is due to families in the top part of
the income distribution.” This is supported too by Avery and Kennickell (1991),who state
that an overwhelming proportion of total saving is due to top income decile of families.
The same finding is reproduced in Bosworth, Burtles and Sabelhaus(1991). They find that
saving is usually negative for the first and second income quintile and highest in the top
quintile. This tends to agree with the findings from the majority of our respondents.
Most respondents also believe that family back ground plays a role in influencing ones
savings decisions. Studies show that family transitions constitute an important source of
52
risk, with the potential to affect everything from wealth accumulation (Cubeddu and RosRull, 2005; Scholz and Seshadri, 2007) to the demand for life insurance (Hong and RosRull, 2006). This could be as a result of the family composition whereby one is in a
nuclear family or extended family. When people marry, have children, or separate
through divorce or widowhood, they can experience dramatic changes in their financial
positions. Wealth increases or divides; spending needs change in relation to housing and
children; and new expectations are formed regarding future income, longevity, and
savings.
Majority of the respondents agreed that peer pressure would influence their savings
decisions.. This was in line with the reviewed literature that stated that peer effects have
been widely shown to affect behavior, with respect to productivity at work (e.g., Falk and
Ichino, 2005; Mas and Moretti, 2009; Bandiera et al.,2010), alcohol consumption (e.g.,
Sacerdote, 2001; Kremer and Levy, 2008), contributions to public goods (e.g., Frey and
Meier, 2004a; Shang and Croson, 2009; Chen et al., 2010; Allcott, 2011; DellaVigna et
al., 2012), and financial decision-making (e.g, Du o and Saez,2002, 2003; Hong et al.,
2004; Bursztyn et al., 2012). Therefore the individual football players could harness the
positive sides of peer influence and form constructive savings clubs with realistic and
attainable financial goals.
On analysis if the age of a player would influence their savings decisions most of the
respondents agreed. This agrees with the life-cycle hypothesis proposed by Modigliani
and Brumberg (1954). The Life Cycle Hypothesis argues that individuals will smooth
consumption over their lifetime given expected lifetime resources. The theory leads to the
prediction that individuals will exhibit a saving rate that rises with income during their
work life, and declines and turns negative during retirement. Hershfield et al (2011) the
degree to which people feel connected with their future selves should make them realize
that they are the future recipients and thus should affect their willingness to save. This
tends to become a reality the older one gets.
On analysis of trust in the financial institutions, majority of the respondents agree that it
affects their savings decision. In recent years the banking industry all over the world have
witnessed legislation and authorities have introduced many new regulations with the main
aim of ensuring the banking sector reduces risks and become more stable (Altuntas,
Berry-Stölzle, & Hoyt, 2011). Such prudential regulations are deliberated to safeguard
53
the banking system from crises that are typically capable of affecting the entire economy.
In Kenya we have heard of banks going into receivership the most recent example being
Chase Bank and Imperial Bank. These incidences tend to erode the confidence of people
who bank in them. Through prudential regulation, central banks aim to assure investors
that a country’s retail banks and other regulated financial institutions will honor their
deposits. Such prudential regulations have two basic goals: to protect small depositors in
particular from losing their savings, and to ensure trust in the financial system as a whole
and preserve the stability of the economy (Conroy, 2000). This will increase savings in
the long run when done effectively.
5.3.2 Challenges Facing Saving Decisions
On analysis of the variable fluctuating income most of the respondents agreed that it does
affect their saving decisions. This is agrees with the literature reviewed. According to
Lusardi and Browning (1996) “the distribution of saving across income groups shows a
very strong positive relationship between income and saving. Therefore if one has
fluctuating income high chances his savings behavior will be fluctuating too. Avery and
Kennickell (1991), state that an overwhelming proportion of total saving is due to top
income decile of families. The same finding is reproduced in Bosworth, Burtles and
Sabelhaus (1991).
The variable management of clubs was evenly spread with most respondents strongly
agreeing that it would affect their decision to save. This is due to the fact that
management usually controls the financing of the clubs. They control the way the clubs
use the money and influence how often the players are paid and what amounts. .
Rintaugu, Mwisukha and Onywera (2012) state that sport administration in Kenya suffers
from multiple problems including weak financial management and leadership, poor
governance. The effects of mismanagement and poor governance tend to trickle down till
the player and his financial decisions. This is in line with the findings of the research.
Most of the respondents strongly agreed that knowledge of finance would help them
make better financial decisions. This is in line with what Clark and Madeleine (2008)
showed that financial knowledge and saving programs can be very effective in
overcoming the decrease in saving.
On analysis of the variable family background most of the respondents agreed that it
would affect their savings decisions. Wealth increases or divides; spending needs change
54
in relation to housing and children; and new expectations are formed regarding future
income, longevity, and savings needs. Family transitions constitute an important source of
risk, with the potential to affect everything from wealth accumulation (Cubeddu and RosRull, (2003); Scholz and Seshadri, (2007)) to the demand for life insurance (Hong &
Rios-Rull, 2007) and as well as savings decisions. The findings strongly agree to the
examined literature.
The variable cost of living and day to day expenses was examined and most of the
respondents were asked whether the cost of living and day to day expenses challenges
their savings decisions, most of them strongly agreed. . The biggest concern regarding
inflation is its impact on savings and financial planning (Von Ungern-Sternberg, 1981) .
Inflation hurts consumer buying power, because increased costs mean spending more to
purchase the same items.
On analysis of the variable availability of cheap credit most of the respondents agreed that
the availability of cheap credit challenges their savings decisions. It was seen that easy
access to M-Shwari mobile loans and facilities such as Kopa Credo and Okoa Jahazi
would end up trapping players in a viscous debt cycle that they would be living from debt
to debt. Such that whatever little earnings they would get they would be directly used to
settle their debts. The findings tend to agree with the literature that cheap credit
sometimes tends to create a debt-trap that in the end serves to impoverish the borrowers
(Besley, 1995).Therefore when it comes to low income earners not more credit and debt,
but rather savings services should be provided. Standard models of saving behavior
indicate that total savings will fall as a result of improved access to credit. Not only
will the precautionary saving motive be mitigated, but accumulation of savings for
investment, household purchases or social events becomes less important. (Browning
& Crossley, 2001)
5.3.3 Solutions to Challenges Facing Savings Decisions
Many of the respondents also agreed that tailor made products would encourage them to
save more. This was in line with the reviewed literature that stated how small savings
schemes are designed to provide safe and attractive investment options to the public and
at the same time to mobilize resources for development (Morduch, 1999)
Micro-savings groups were noted to be a great motivator towards spurring individuals to
save collectively for a common goal. This is in line with the literature analyzed that states
55
that the chama phenomenon arose out of the idea of harambee, which means "all
together", in the late 1980s and 1990s. It can also be referred to as a Self-Help Group
(SHG). It is registered or unregistered group of entrepreneurs with homogenous social
and economic background, voluntarily coming together to save small amounts on a
regular basis (Gupta & Singh, 2016).
The group members use collective wisdom and peer pressure to ensure proper end use of
credit and timely repayment is done. SHG’s are participative and democratic in character.
They follow the cooperatives principles of collective endeavor for individual and
community development by overcoming the deeply entrenched social bottlenecks and
economic hurdles. There should be true democratic culture in which all members must
participate actively in decision making process. Collective responsibility, leadership with
fixed tenure mutual trust and cooperative philosophy should be driving force for SHG.
(Kisera & Muturi, 2015)
Chama’s act as a way of saving declares Mr. Makhulo a financial consultant with MGK
consultants, “The minute you contribute Kshs 2000 at the beginning of the month you are
supposed to get a certain amount later, the total sum being the sum of money you
contributed multiplied by the number of members in the Chama. It’s a great way of
saving, especially for those without the discipline of saving.” He also advises, “For a
Chama to be a source of benefit, members should not receive their share and store it. A
focused person should put their money where it can multiply.” He also advices that,
before investing one should consider the risk factor, he is also of the opinion that one
should not bank such money as the bank’s interest is insignificant. Yes, a Chama is a
great informal way of harnessing capital to bring about self-improvement and achieve
financial success. (Mukunya, 2014)
Educational and sensitization forums were also noted to be a major contributor in
improving and influencing the footballer’s savings decisions from the findings. Per the
literature analyzed understanding money, banking, credit, and how best to use financial
assets to build wealth is an important skill for all families, including the low-income and
disadvantaged. Financial literacy can provide the knowledge necessary to manage
household budgets, initiate savings plans, manage debt, and make strategic investment
decisions.
With these basic financial planning skills, it is easier to meet ongoing
obligations as well as to maximize longer-term financial security. Financial literacy
56
training can also inform consumers about bank services designed to build personal credit
and help them decide which options best meet their specific needs. Financial literacy
training should be provided by a variety of national and local entities including
community-based organizations, community credit unions, and the Cooperative Extension
Service. National organizations and schools should also offer introductory courses on
savings, checking, and credit to teens.
Other sources of income were another contributing factor to increased savings decisions
according to the respondents. This is because of the financial risks involved with relying
on one source for all your incoming cash, it is critical to consider having at least one
additional source of income. To meet the rising costs of living, people are building
multiple streams of income. It has become a necessity. If the high rates of unemployment
and mounting job losses teach us anything, it is that nobody's job is safe. Unfortunately
for most people, their only source of income is from their job, which can be a risky way
to live. Some couples may be more fortunate and have a spouse bringing in money each
month, but they are still relying on a job for their livelihood. (Moolanomy, 2010)
Interest rates determine the amount of interest payments that savers will receive on their
deposits. An increase in interest rates will make saving more attractive and should
encourage saving. A cut in interest rates will reduce the rewards of saving and will tend to
discourage saving. (Pettinger, 2013) Income and substitution effect of higher interest rates
affect savings in that if interest rates fall, the reward from saving falls. It becomes
relatively more attractive to hold cash and / or spend. This is the substitution effect – with
lower interest rates, consumers substitute saving for spending. However, if interest rates
fall, savers see a decline in income because they receive lower income payments. A
pensioner relying on interest payments from saving may feel he needs to save more to
maintain the income from savings. Usually, the substitution effect dominates. Lower
interest rates make saving less attractive. But, for some, the income effect may dominate,
and people may respond to lower interest rates by saving more to maintain their standard
of living.
Financial institutions and banks should have tailor made products to encourage them to
save and creation of saving schemes. Small savings schemes should be designed to
provide safe and attractive investment options to the public and at the same time to
mobilize resources for development (Morduch, 1999).
57
In terms of use of budgets to manage costs and increase their savings most respondents
agreed. This implies that the practice of using budget to manage costs had a positive
effect on the savings decisions of the respondents. This finding agrees with Chandra et al
(2011) who held that the budgeting process make it more realistic and therefore effective
as a cost management tool. This is therefore a part of the viable solution to the various
challenges facing savings decisions and that financial management literature has
associated with financial literacy and success.
5.4 Conclusion
5.4.1 The Factors Influencing Savings Decisions
Factors influencing savings decisions were noted to be many. Some were seen to be
avoidable and external such as peer pressure and others were seen to be internal such as
perception about the future which is unavoidable and personal. The study established that
most of the respondents saved one way or the other be it formal or informal. Their trust in
financial institutions played a major role too in where they saved. Many of the
respondents believed that their education level, income level and financial literacy levels
played a critical role towards their savings behavior. With the majority stating that the
more educated they would be the more they would save.
5.4.2 The Challenges Facing Savings Decisions
From the findings many of the respondents agreed that their savings decisions were
challenged by the management of the clubs they play for. This would be in regards to the
release of their wages on time and the frequency to which they are paid. They also agreed
that the fact that they don’t have a fixed income their savings decisions were challenged.
According to the findings also family background and financial literacy were major
challenges to their savings decisions.
5.4.3 Solutions to the Challenges Facing Saving Solutions
Per the findings there is a need for financial literacy programs which can encourage the
respondents to save. Tailor made products and an increase in savings interest rates were
also noted that they would encourage the respondents to save more. Use of a budget to
manage costs and day to day expenses was also accepted as a viable solution by the
majority.
58
5.5 Recommendation
5.5.1 Recommendation For Practice
5.5.1.1 Factors Influencing Savings Decisions Of Footballers In The Kenyan premier
league
When young footballers are signed there is a need for the clubs to establish
communication channels and programs to enable them become aware of the factors that
they may influence their savings decisions and the importance of savings. There is also a
need for the clubs to higher qualified financial advisors to put up programs and seminars
where footballers can undergo such training. Thus, football clubs management should not
only be focused with results on the pitch but the wellness of their players and
performance of the pitch.
5.5.1.2 Challenges Facing Footballers Savings decisions
From the findings majority of the respondents agree that the cost of living and the day to
day expenses are one of the major challenges facing their savings decisions. In order to
solve this footballers are encouraged to learn how to budget using the resources they have
which can take them a long way and not to squander their resources on alcohol and
temporary non-essential things. In addition, the individual footballers should seek other
sources of revenue be it from farming or selling of clothes just to name but a few other
sources of income.
5.5.1.3 Solutions To Challenges Facing Footballers’ Savings Decisions
From the findings, it is necessary for the clubs and individuals to undertake regular
financial literacy courses that would ensure knowledge acquisition and keeping up to date
with current financial products and services available in the market to improve their
savings decisions. In addition, it is important to encourage clubs to form saving schemes
for their players as well as regular training and preparation for life after the game that
would make players more conversant with retirement and life after their playing career.
5.5.2 Recommendation for Further Studies
The study focused only on mostly individual factors influencing savings decisions, it is
recommended that other studies be done to determine how group factors and external
59
factors that cannot be controlled influence savings decisions and investment decisions.
The study only focused on 8 clubs and therefore these results are skewed towards the
perceptions and data from the 8 teams. It is suggested therefore that such a study be done
in other teams and leagues to increase the statistical power of the study and make the
results more reliable.
60
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APPENDICES
APPENDIX I: QUESTIONNAIRE
Please take a few minutes to answer the following questions to help understand the
factors influencing the saving decisions of professional footballers in the Kenyan Premier
League. The data collected here will be anonymous and your confidentiality is highly
assured.
SECTION 1: GENERAL INFORMATION
Please answer the questions as accurately as possible by ticking the appropriate answer
or filling in the blank.
1. What is your age in years?

16 -20
□

21 – 25
□

26 – 30
□

31 -35
□

Above 35
□
2. What is your gender?

Male
□

Female
□
3. Which of the following best describes your position in the team?

Goalkeeper
□

Defender
□

Midfielder
□

Striker
□
4. What is your level of professional work experience in the football industry?

0 – 2 years
□

3 – 5 years
□
71

6 – 8 years
□

More than 9 years
□
5. What is your highest level of education?

High School Certificate
□

College Diploma
□

University Degree
□

Primary School Certificate
□
6. What is your marital status?

Single
□

Married
□
7. Does your club pay bonuses?

Yes
□

No
□
8. How long is your contract?

0-2 years
□

3-5 years
□

6- 8 years
□

More than 9 years
□
9. Do you save?

Yes
□

No
□
72
10. Where do you save? ( you can choose more than one)

In a chama
□

In a savings account
□

M- Shwari
□

Airtel Money
□

Any other (specify)
_________________________________________
11. Does your team have a savings scheme?

Yes
□

No
□
12. Would a longer contract enable you to save more money?

Yes
□

No
□
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SECTION2: FACTORS INFLUENCING SAVINGS DECISIONS
Strongly
Agree
Agree
Neutral
Disagree
Strongly
Disagree
Please indicate to what extent the factors below influence your savings decisions:
1. Your level of education
2. Your level of income
3. Your family background i.e. from a
single parent family or nuclear family
or extended family
4. Peer pressure
5. Your age
6. Your knowledge about saving
schemes
7. Your trust in financial institutions
8. Your perception about the future
9. The rate of inflation
10. Increased availability of borrowing
opportunities e.g. Mshwari
11. Availability of credit facilities from
shops and friends
12. Real interest on savings deposits
13. The length of your contract
14. The amount of tax you have to pay
15. Please state any other factor that influences your savings
_______________________________________________________________
_______________________________________________________________
_______________________________________________________________
74
SECTION 3: CHALLENGES FACING SAVING DECISIONS
1. Fluctuating income
2. The management of clubs
3. Your knowledge of finance
4. Family background i.e family or
nuclear family or extended family
5. The cost of living and your day to
day expenses
6. The availability of cheap credit
75
Agree
Strongly
Agree
Neutral
Disagree
Disagree
Strongly
Please indicate to what extent the challenges below influence your savings decisions:
SECTION 4: SOLUTIONS TO CHALLENGES FACING SAVING DECISIONS:
Agree
Strongly
Agree
Neutral
Disagree
Disagree
Strongly
Please tick the extent to which you agree with the following statements:
1. Financial literacy programs will
encourage me to save.
2. Having other sources of income will
increase my ability to save.
3. Tailor made products by banks will
increase my ability to save and encourage
me to save more.
4. Increase in savings interest rates will
encourage me to save
5. Use of a budget to manage my costs will
help me save more.
6. What other solutions would you suggest to the challenges facing saving decisions?
__________________________________________________________________
__________________________________________________________________
7. Any other comment or opinion on factors influencing the savings decisions of
footballers in the Kenyan Premier League?
__________________________________________________________________
__________________________________________________________________
THANK YOU
76