Knowledge of financial securities in Uganda: A case study of the Kampala metropolitan area

Abstract

This study was taken on to determine the fraction of the population in Uganda that is informed about financial securities and the main factors that affect this knowledge. The study covered 50 randomly selected respondents. The main objectives of the study were to know the proportion of Ugandans that know about financial securities and to find out the reasons as to why Ugandans are informed about financial securities.64% of respondents were found to know about financial securities. University education and knowledge of brokerage firms were identified as the main factors influencing knowledge of financial securities with correlation coefficients of 0.35 and 0.37 respectively. The logistic regression that explained 53% of the variation in knowledge of financial securities in Uganda had University education and the Armed forces occupation as reference responses. It revealed Secondary education (p-value 0.024) and coefficient (-5.303681), Service and sales occupation (p-value 0.027) with coefficient (-6.254027) and knowledge of brokerage firms (p-value 0.034) with a coefficient (3.235413) as the significant factors. The odds of someone with secondary education knowing about financial securities were 99.5% [100-(0.00497*100)] lower than the odds of someone with university education. The odds of someone in the service and sales occupation knowing about financial securities were 99.8% [100-(0.00192*100)] lower than those of someone in the armed forces occupation. Someone that has knowledge about brokerage firms was 2400 % [(100*25)-100] more likely to know about financial securities with other factors held constant. This analysis satisfied the hypotheses that “Highly educated people know more about financial securities” and “Knowledge of brokerage firms increases knowledge of financial securities.” It was recommended that in order to increase the knowledge of financial securities in Uganda, trainings about the capital markets should be based not only in institutions of higher learning but also in other levels such as Primary and Secondary levels. Brokerage firms should also take the initiative to train the masses about what financial securities are and how best the public can benefit from them as an investment alternative.