Influence of Financial Literacy on Retail Investment Decision-making in Ghana

Despite increasing access to financial markets, many Ghanaian retail investors continue to make suboptimal investment decisions—often due to limited financial literacy. This study examines the influence of financial literacy, operationalized through financial knowledge, behavior, and attitude, on investment decision-making among retail investors in Ghana. Grounded in the Theory of Planned Behavior and Behavioral Finance Theory, the study employs a quantitative approach using Partial Least Squares Structural Equation Modeling (PLS-SEM) on data from 406 respondents in Accra. Findings indicate a significant and positive relationship between all three financial literacy components and investment decision-making. The results confirm that financial literacy enhances rational investment behavior and mitigates decision biases, thereby reinforcing the applicability of TPB and behavioral finance in emerging economies. The study recommends the implementation of targeted financial education programs to strengthen investor decision-making capacity and financial resilience.