Financial Literacy and The Intention To Participate In the Emerging Ethiopian Capital Market: A Study of Potential Investors
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Date
2025-08
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Addis Ababa University
Abstract
The general objective’ of this research is to explore investors' financial literacy and their participation in the Ethiopian capital market. Explanatory research design and mixed of
quantitative and qualitative are employed. Through judgmental sampling of 384 respondents are participated. The study revealed that respondents possess a high level of financial
knowledge, particularly in calculating interest and understanding investment diversification. While they expressed strong confidence in making personal investment decisions, there was
limited interest in exploring new financial products. Access to financial information was generally high, with most respondents finding it easy to understand. Capital market
participation potential was also strong, with many feeling knowledgeable and ready to invest. Regression analysis confirmed that financial knowledge, attitude, and access to information
all significantly and positively influence participation potential, with financial knowledge showing the strongest effect. These findings highlight the critical role of financial literacy in
promoting active engagement in Ethiopia’s emerging capital market.
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Keywords
Financial Literacy, Financial attitude, Investors, capital market, Capital Market Participation.