Investigating Factors Inhibiting Institutional Investors From Investing In Namibia: A Study Of Pension Funds

ABSTRACT

The study investigated the factors inhibiting pension funds from investing their assets in Namibia. The study identified also financial instruments where pension funds’ assets can be invested in Namibia and suggested measures to encourage pension funds investors to invest in the local economy. The study adopted quantitative approach. The probability random sampling technique was used to sample pension funds and investment companies investing pension funds’ assets. A questionnaires technique was used to collect quantitative and qualitative data from pension funds’ trustees and investment managers. Social Package for Social Science (SPSS) software and Microsoft excel were used to analyse data. The data collected were presented in frequency table, graphs and in narrative form.

The study found that the major factors inhibiting pension funds’ assets from being invested in Namibia are; shallow capital markets, limited financial instruments, lack of skills and knowledge in the field of investments, low returns and lack of track records on the performance of the local assets. The study found out also that the Namibian financial markets has varieties of asset classes that are issued in small volume. To encourage pension funds to invest in the local economy, the study recommends the government and central bank to deepen the capital markets, the establishment of a reliable local assets performance database, credit enhancement guarantees on risky assets and introduction of formal and informal education in investments and financial modelling.