Open AccessWhat Drives Individual Investors to Invest in Mutual Funds in a Developing Economy
Author(s) -
Manasseh Mwanza,
Stella Zulu Chisanga,
Chanda Shikaputo,
Stephen Mpembele
Publication year - 2021
Publication title -
sustainable business and society in emerging economies
Language(s) - English
Resource type - Journals
eISSN - 2708-2504
pISSN - 2708-2172
DOI - 10.26710/sbsee.v3i3.1945
Subject(s) - financial literacy , preference , business , originality , investment (military) , mutual fund , finance , value (mathematics) , affect (linguistics) , marketing , economics , qualitative research , microeconomics , social science , linguistics , philosophy , machine learning , sociology , politics , political science , computer science , law
Purpose: The aim of this study is to investigate factors that influence investment in mutual funds by individual investors in a developing economy. Drawing insights from the theory of planned behaviour, the study identified and tested the effect of awareness, attitude, financial literacy and preference for other competing investments on intention to invest in mutual funds by individual investors.
Design/Methodology/Approach: Data was collected from 280 respondents in Zambia. Data was analysed using correlations and hierarchical regression models.
Findings: The study reveals that awareness and attitude towards mutual funds significantly influence intention to invest in mutual funds. Surprisingly, financial literacy and preference for other investments do not significantly affect an individual investor’s intention to invest in mutual funds.
Implications/Originality/Value: This study contributes to the financial services marketing literature by increasing understanding of individual investors’ investment decisions and drivers that influence intention to invest in mutual funds in Zambia. The study recommends that mutual funds marketers should invest more in building awareness and positive attitude towards investment in mutual funds in order to develop retail demand. Also, investment companies and financial services marketing policy makers should carefully consider their financial literacy programmes as the study reveals that financial literacy and competing investments are not significant drivers.