Financial Literacy and Investment Decisions: A Study of Wa Municipality

Abstract

The research sought to investigate study on financial literacy and investment decision issues in the Wa Municipality of the Upper West Region of Ghana. In particular, the study specifically examined the levels of understanding and knowledge of individuals in savings and borrowing, investment and insurance in Wa Municipality; examine the classifications of individuals on financial literacy in the Wa Municipality and estimate the effect of financial literacy on individuals’ opinions and decisions on personal issues in finance in Wa Municipality. This study was a quantitative research which employed both descriptive and inferential statistics with a cross sectional design. The target population of the study consisted of investors, salary earners, business people and some workers of financial institutions in the municipality. Sample of 162 people were selected using stratified and convenience sampling. A questionnaire was employed and data was analysed using Analysis of Variance and Logistic Regression analyses. The findings showed that in terms of the knowledge levels of individuals on financial issues, the study found that there is low general knowledge in finance, some considerable level of knowledge of savings and borrowing and highly deficient understanding of financial markets and investment. Also, gender, qualification and working experience are the main drivers of knowledge on financial issues. Again, the significant factors that underlie the classifications of people on financial literacy are based on gender, educational qualification, age, occupation, income and field of study.