Determinants of Government Employees’ Decision towards Investing In Unit Trusts in Tanzania, A Case study of UTT AMIS Dodoma City.
Purpose: The study aimed to examine the determinants of government employees’ decisions to invest in unit trusts in Tanzania. Specifically, it assessed the influence of awareness, financial literacy, and risk perception on investment intention toward UTT AMIS products. The objective was to understand how these behavioural and cognitive factors shape participation in collective investment schemes among public-sector workers.
Design/Methodology/Approach: An explanatory research design was adopted. Quantitative data were collected from 123 government employees in Dodoma using structured questionnaires, while qualitative insights were obtained from six UTT AMIS officials. The analysis employed descriptive statistics, correlation analysis, and multiple regression to examine relationships between variables. Qualitative responses supported the interpretation of behavioural patterns and institutional perspectives.
Findings: The regression model explained 22.5% of the variance in investment intention (R² = 0.225). Awareness emerged as the only statistically significant predictor (β = 0.409, p < 0.001), suggesting that greater understanding of UTT AMIS products substantially increases the likelihood of investing. Financial literacy had a positive but insignificant effect (β = 0.173, p > 0.001), indicating that general financial knowledge does not translate into investment action without product-specific awareness. Risk perception showed a negative but insignificant influence (β = −0.038, p > 0.001). Qualitative findings highlighted persistent gaps in product knowledge, limited sensitization efforts, and cultural preference for physical assets as major barriers to unit trust uptake.
Originality/Value: The study provides one of the few empirical assessments of behavioural determinants of unit trust investment in Tanzania’s public sector. By integrating both employee and institutional perspectives, it offers unique insights into the role of awareness and behavioural biases in shaping participation in capital market products in emerging economies.
Practical Implications: The findings emphasize the need for targeted awareness campaigns, simplified product communication, and continuous investor education to increase retail participation in unit trusts. UTT AMIS, HR departments, and policymakers can use these insights to design more effective engagement strategies, strengthen distribution channels, and enhance product visibility among government workers.
Social Implications: Improving awareness and participation in unit trusts can support broader national goals, including financial inclusion, long-term savings culture, and capital market development. Increased investment in collective schemes enhances household financial stability and contributes to national economic growth by expanding domestic investment pools.
Keywords: Awareness, Financial Literacy, Risk Perception, Investment Intention, Unit Trusts, Government Employees, UTT AMIS
