Evaluating The Effects of Financial Literacy on Investment Choices Among Zambian Youths: A Case Study of Lusaka District

This study examined the relationship between financial literacy and investment choices among youths in Lusaka District, Zambia. A quantitative descriptive cross-sectional design was used with 139 valid respondents purposively selected from youth investors and non-investors in Lusaka District. Data were collected using a structured questionnaire and analysed in MegaStat using frequencies, percentages, means, standard deviations, Pearson correlation, simple linear regression, and a Chi-square Test of Independence. Financial literacy and perception items were measured on a five-point Likert scale, where higher scores represented stronger agreement or reported knowledge. Financial literacy was assessed through financial concepts, inflation, investment knowledge and options, and investment returns. Inflation recorded the highest mean score (4.07), followed by investment knowledge and options (4.00), financial concepts (3.96), and investment returns (3.52). Overall, 50.4% of respondents had financial-literacy levels above 50%, while 49.6% were at or below 50%. Although 54.6% agreed or strongly agreed that financial literacy influenced investment decisions, the relationship was extremely weak and not statistically significant (r = 0.041, p = 0.631). Financial literacy explained only 0.2% of the variation in investment decisions (R² = 0.002), while the Chi-square Test of Independence found no significant association between financial-literacy level and current investment status (χ²(3) = 2.082, p = 0.556). Respondents nevertheless reported perceived benefits in reduced investment risk (73.3%), profitability (69.1%), and consistent investment behaviour (66.2%). The findings extend the application of Financial Capability Theory by showing that knowledge may be an enabling resource but does not by itself overcome constraints on investment participation. The study recommends combining financial education with practical investment guidance, access to suitable investment products, income opportunities, and consumer protection.