Effects of Financial Literacy on Investment and Savings Decisions Among Government Institutions’ Employees in Mwanza City, Tanzania, 2020.

Abstract

The main purpose of this study was to examine the effect of financial literacy on investment and saving decision among Government employees in Mwanza city. The study was hinged on three research questions which sought to examine the effect of financial knowledge, financial awareness and financial attitude on these decisions. The study was conducted based on the theory of planned behaviour, social learning theory and expected utility theory. The study adopted a cross-sectional research design whereby a multistage sampling technique was used to select 271 respondents who were drawn from government institutions in Mwanza. Primary data were collected through the use of questionnaires. A Binary logistic regression model was used to examine the nature of the relationship between financial literacy and investment and saving decision. The findings show that there is a significant influence of financial knowledge and attitude on saving and investment decision whereas financial awareness was insignificant. The results indicate that most of the Government employees pointed out that there is an impact of financial literacy in making sound saving and investment decisions. It is therefore recommended that more financial literacy programmes should be organized by the financial institution to create awareness. The government should also include financial literacy in the educational curriculum of secondary schools and higher learning institutions and more policy campaigns on financial literacy should be in place to boost government employee’s financial knowledge and attitude for sound investment decisions to be realized by the latter.