An Econometric Investigation into the Role of Consumer (Mis)Trust in Financial Service Use and Realisation of Enhanced Financial Health

Our thesis work considers an econometric investigation into the operations of nascent financial systems in the Sub-Saharan African region. Specifically, we consider the interaction between consumers and service providers in financial service use and realisation of enhanced household welfare. We consider evidence from the Kenyan financial system. In the first part, we explore the determinants of (mis)trust in financial services. After establishing the determinants of consumer (mis)trust in financial services, in chapter three we investigate the role of consumer (mis)trust in financial services and its cross-influence in financial service utilisation. We establish that consumer (mis)trust in financial institutions has a key role in consumer use of appropriate financial services. This role is established to have an inverse impact (negative cross-influence) between formal and informal financial service use. Lastly, in chapter four, we investigate the influence of financial service use in improving household welfare through exploring the financial health index. Financial health is a good proxy for assessing the impact of the financial sector on economic agents, especially households.