Financial Literacy, Investor Awareness and Investment Decisions: A Review of Literature

Full Article - PDF

Published: 2023-01-12

Page: 13-18

Malgit Amos Akims *

Writestep Consulting Limited, Nigeria.

Funmilayo Shalom Abayomi

Writestep Consulting Limited, Nigeria.

Kanang Amos Akims

Writestep Consulting Limited, Nigeria.

Hannington Kigame Avedi

Kenyatta University, Kenya.

Eweet Toto Josephat

Kenyatta University, Kenya.

Cavine Onyango Ouma

Kenyatta University, Kenya.

*Author to whom correspondence should be addressed.


The study was based on a review of literature where various views obtained from theoretical and empirical works were evaluated. Based on a systematic review methodology, the study sought to critically review literature on the relationship between financial literacy and investment decisions. The study further reviewed literature on the nexus between investor awareness and investment decisions relationships. In view of reviewed literature, the study documented that financial literacy, investor awareness and investment decisions have underlying relationships. Specifically, financial literacy leads to sound investment decisions as it provides investors with the capacity and ability to carry out both technical and fundamental analysis which in turn enables them to make informed investment decisions. Furthermore, investor awareness strengthens investment decisions. Investor awareness is characterized by an investor’s level of perception of risks, underlying risk appetite as well as expected rate of return on an investment. As such, improvements in the levels of awareness lead to more informed investment decisions.

Keywords: Financial literacy, investor awareness, investment decisions, literature review

How to Cite

Amos Akims, M., Shalom Abayomi, F., Amos Akims, K., Kigame Avedi, H., Toto Josephat, E., & Onyango Ouma, C. (2023). Financial Literacy, Investor Awareness and Investment Decisions: A Review of Literature. Asian Journal of Economics, Finance and Management, 5(1), 13–18. Retrieved from


Download data is not yet available.


Hasanuh N. Influence of financial literacy and financial attitude on personal investment decisions. Adv Bus Manag Entrep. 2020;424-8.

Alaaraj H, Bakri A. The effect of financial literacy on investment decisions making in Southern Lebanon. Int Bus Acc Res J. 2020;4(1):37-43.

Mugo E. Effect of financial literacy on investment decisions among savings and credit Co-Operative Societies Members in Nairobi [MSc thesis]. KCA University; 2016.

Chebib N, Dagher W, Atala IA. Foreign direct investment in Lebanon. International Journal of Economy. Manag Soc Sci. 2016;5(3):13.

Madi A, Yusof RM. Financial literacy and behavioral finance: conceptual foundations and research issues. J Econ Sustain Dev. 2018;9:2222-855.

Lusardi A, Mitchell OS. The economic importance of financial literacy: theory and evidence. J Econ Lit. 2014;52(1):5-44.

Harsoyo EC, Zulaikha. The impact of investor awareness level of the red flagging on investment decisions with investor risk tolerance as intervening variable. International Journal of Business. Econ Law. 2021;24(6).

Anggraeni R. Aduh, 60% perusahaan bangkrut Gegara COVID-19.; 2020.

Van Duuren E, Plantinga A, Scholtens B. ESG integration and the investment management process: fundamental investing reinvented. J Bus Ethics. 2016;138(3):525-33.

Mutswenje VS. A survey of the factors influencing investment decisions: the case of individual investors at the NSE. Int J Humanit Soc Sci. 2014;4(4):92-102.

Moors A. Automaticity: componential, casual and Mechanistic Explanations. Annu Rev Psychol. 2016;67(1):263-87.

Gawronski B, Sherman JW, Trope Y. Two of what? A Conceptual Analysis of Dual process Theories. Dual process theories of social mind, 3-19. New York: Guilford Press; 2014.

Moors A. Examining the Mapping problem in dual Process Models. Dual process theories of social mind, 20-34. New York: Guilford Press; 2014.

Tversky A, Kahneman D. Rational choice and the framings of decisions. J Bus. 1986;59(S4):251-78.

Weirich P. A decision markers’ options. Philos Stud. 1983;44(2):175-86.

Brim OG. Personality and decision processes. Studies in the Social Psychology of Thinking. 1962.

Alexander ER. The limits of uncertainty: A note. Theor Decis. 1975;6(3):363-70.

Bell DE. Regret in decision making under certainty. Oper Res. 1982;30(5):961-81.

Faoziah I, Sarojani DK, Norfiza A. Relationship between financial literacy and financial distress among youths in Malaysia – an empirical study. Geogr Malays J Soc Space. 2013;9(4):106-17.

Garang M. The effect of financial literacy on investment decisions in the juba city South Sudan [MBA thesis]. University of Nairobi; 2016.

Janor H, Yakob R, Hashim NA, Zanariah, Wel CAC. Financial literacy and investment decisions in Malaysia and United Kingdom: A comparative analysis. Malays J Soc Space. 2016;2:106-18.

Akims MA, Jagongo A. Financial literacy and its impact on investment decisions in Nigeria: A theoretical perspective. Int J Sci Res Innov Technol. 2017;4(11):2313 – 3759.

Ramanujam V. Does investment awareness have effect on decision making among the information technology professionals? Int J Bus Manag Invent. 2018;7(8):1-8.

Kumar DAT. The impact of financial literacy on investment decisions with special reference to undergraduates in western Province, Sri Lanka. Asian J Contemp Educ. 2020;4(2):110-26.

Prabu A, Gajendran A. Descriptive study on investors stock market awareness and their perception towards investment pattern (with special reference to Tamil Nadu). Nat Volatile Essent Oils. 2021; 8(4).

Bearman M, Smith CD, Carbone A, Slade S, Baik C, Hughes-Warrington M et al. Systematic review methodology in higher education. Higher Educ Res Dev. 2012;31(5):625-40.

Snyder H. Literature review as a research methodology: an overview and guidelines. J Bus Res. 2019;104:333-9.

Tversky A, Kahneman D. The framings of decisions and the psychology of choice. Science. 1981;211(4481):453-8.