Investment Planning and Decision-Making among Individual Investors in Emerging Markets Evidence from the Dar es Salaam Stock Exchange, Tanzania

Abstract

Individuals evaluating investment options typically consider objectives, risks, and expected returns. In Tanzania, stock market investment is minimal, with only about 1% of the population involved. This study investigates the factors influencing investment decisions in Tanzania, focusing on motivations and decision-making processes related to share ownership. Using a cross-sectional design, data were collected via questionnaires from 100 shareholders and 100 non-shareholders in Dar es Salaam, and analysed using descriptive statistics and Binary Logistic Regression. Results indicate that participation in social and economic groups significantly impacts investment plans and decisions. Awareness of the stock market, awareness creation efforts, and family influence were also crucial factors. Conversely, income levels and media access showed no significant effect on share investment decisions. Enhancing awareness of the Dar es Salaam Stock Exchange (DSE) and fostering social interactions are essential to increase investment. The study recommends that the DSE organise seminars and training for prospective investors and utilise both traditional and modern socialisation methods to encourage investment planning and decision-making. This research contributes to understanding individual share investment behaviour in Tanzania and suggests policy interventions to promote broader stock market participation.