Financial Literacy, Saving Practices, Loan Management, and Financial Performance of Youth-Led VSLAs in Nakivale Refugee Settlement

Abstract

This study examined the relationship between financial literacy, saving practices, loan management, and the financial performance of youth-led Village Savings and Loan Associations (VSLAs) in Nakivale Refugee Settlement. The study was guided by three objectives: to determine the relationship between financial literacy and financial performance, to examine the relationship between saving practices and financial performance, and to assess the relationship between loan disbursement and recovery practices and the financial performance of youth-led VSLAs. A cross-sectional correlational research design using quantitative and qualitative approaches was adopted. The study involved 156 respondents, and data were collected using questionnaires and the interview method. Quantitative data were analysed using descriptive statistics, Pearson correlation, and regression analysis, while qualitative data were analysed thematically using NVivo software. The findings revealed that financial literacy had a positive and significant relationship with financial performance, indicating that financially knowledgeable members make better financial decisions and improve VSLA outcomes. Saving practices also positively influenced financial performance, demonstrating that consistent and effective saving behaviour enhances financial stability and sustainability. Similarly, loan disbursement and recovery practices significantly contributed to improved financial performance by strengthening loan management and reducing repayment challenges. The study concluded that financial literacy, saving practices, and effective loan management are key determinants of financial performance among youth-led VSLAs in Nakivale Refugee Settlement. The study recommends continuous financial literacy training, promotion of disciplined saving practices, and strengthening of loan management systems to enhance the sustainability and growth of youth-led VSLAs.