Social media influencers are influencing Gen Z investment decisions in Tanzania, study warns

Senior Journalist with The Citizen

Mwananchi Communications Limitted

Dar es Salaam. A new study has raised concerns over the growing influence of social media personalities on investment decisions among Generation Z, warning that while digital platforms have widened access to financial knowledge, they may also expose young investors to risky and unqualified advice.

The study, conducted by researchers Hamza Hussein Malombe and Furaha Kowero of the University of Dodoma (UDOM), highlights how financial influencers, commonly known as “finfluencers”, are increasingly shaping how young people approach investing in Tanzania and other emerging markets.

The findings come at a time when social media platforms such as TikTok, Instagram and YouTube have become primary sources of information for young people seeking guidance on wealth creation, cryptocurrencies, stocks and personal finance.

For a generation that largely consumes information through smartphones, financial influencers are increasingly replacing traditional sources of investment advice, including bank advisers, stockbrokers and business publications.

While the shift has democratised access to financial information, researchers warn that it has also blurred the distinction between genuine expertise and online popularity, creating new risks for inexperienced investors.

“The democratisation of financial information is undoubtedly a welcome development because it has removed barriers that once limited investment knowledge to financial institutions and experts,” the study notes.

“Yet it has also created a new challenge: distinguishing credible financial education from persuasive content produced by individuals with little or no professional expertise.”

The researchers are now calling for ethical standards in financial influencing and stronger financial literacy programmes to help young people make informed investment decisions.

They argue that the same platforms that provide easier access to financial information can also serve as fertile ground for misinformation.

According to the study, many financial influencers build large audiences through what appears to be expertise, authenticity and strong online visibility, despite lacking formal financial advisory qualifications.

“The result is that many young investors may make financial decisions based more on online popularity than professional competence,” the researchers warn.

Using responses from 364 digitally active Tanzanian Gen Z participants aged between 18 and 27 years, the researchers examined six factors influencing investment decisions.

Their statistical model explained 61.7 percent of the variation in investment behaviour, indicating that social media exerts considerable influence on how young people approach investing.

Among all the variables examined, one factor emerged as particularly influential: the Fear of Missing Out (FOMO).

The study found that FOMO was the strongest predictor of investment behaviour, surpassing even influencer credibility and trust in digital platforms.

Researchers found that repeated exposure to success stories, screenshots of investment gains and viral “money-making opportunities” creates psychological pressure for young people to invest quickly for fear of missing potential returns.

“Rather than making decisions through careful analysis, many risk acting out of emotional urgency,” the study says.

For investment educators, the finding reinforces a long-established principle that emotional decision-making remains one of the greatest threats to sound investing.

However, the study also offers encouraging findings.

Contrary to common assumptions surrounding social media culture, factors such as likes, follower numbers and testimonials did not significantly determine whether Gen Z participants made investment decisions.

Instead, the researchers found that perceived credibility, engagement with financial content and trust in the platform itself played a stronger role.

Perceived similarity with influencers also had a smaller but notable effect.

The findings suggest that many young investors may be becoming more selective and analytical than commonly assumed.

Financial literacy specialist Obbi Maino said the results indicate an encouraging shift away from “viral investing” towards a greater focus on the quality of financial information.

However, he cautioned that credibility itself can be misleading in online environments.

“Polished presentation, confident delivery and algorithm-driven popularity can easily create an illusion of expertise,” he said.

That concern reflects the researchers’ warning that perceived credibility should not automatically be equated with actual expertise, particularly in markets where regulatory oversight of financial advice remains limited.

The study argues that financial educators, universities, regulators and fintech companies all have a role to play in strengthening digital financial literacy.

Mr Maino said Tanzania’s expanding capital markets and growing digital finance ecosystem require a generation of investors who understand risk as much as opportunity.

“Sustainable wealth creation depends less on chasing viral trends and more on understanding diversification, long-term planning and disciplined decision-making,” he said.