Financial Inclusion and Mutual Fund Investment Behavior among Individual Investors in Kathmandu Valley

Abstract

The paper studies the effect of financial inclusion (financial awareness, income/affordability, financial literacy, accessibility, and trust) on mutual fund investment behavior of individuals in Nepal’s Kathmandu Valley through a positivist, quantitative, cross-sectional approach, involving primary data collected through structured questionnaires from 100 individual investors. According to multiple regression analysis, the result obtained shows that the model is statistically significant and explains 70.4% of the variation in investment behavior (R² = 0.704). In particular, accessibility (β = 0.359, p < 0.001) has the highest significant positive impact, followed by Trust (β = 0.340, p < 0.001) and Financial Awareness (β = 0.238, p = 0.003). Meanwhile, Income/Affordability and Financial Literacy do not have any significant impact on mutual fund investment behavior. The research concludes that improvements in terms of accessibility, institutional trust, and investor financial awareness, rather than income and financial literacy alone, are very important for motivating investors towards mutual fund investment.