MAJOR FACTOR OF SAVING BEHAVIOUR OF HOUSEHOLD IN ETHIOPIA: THE CASE OF BENISHANGUL GUMUZ REGIONAL STATE (original) (raw)
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Determinants of Saving Behavior of Households in Ethiopia: The Case Benishangul Gumuz Regional State
Journal of economics and sustainable development, 2017
This study examined the factors that affect saving behavior of rural households in Benishangul Gumuz Regional Sate. It employed descriptive statistics and double hurdle model to analyze the data collected from a sample of 325 rural households in the study area. The descriptive result showed that about 83.4 percent of sampled households involved in saving of which 68 percent use formal financial institutions and the remaining opt for alternative saving options. The result of double hurdle model provided empirical evidence on a positive significant effect of age, income and level of education of the head on a decision of households to save; whereas household size, distance to formal financial institutions and employment status have negative influences on household's decision to save. With regards to the extent of saving; income of household head, level of education, landholding size and involvement in petty trade has a positive significant impact on amount of saving; whereas household size, employment status and distance to formal financial institutions significantly reduced the amount of saving by households. The findings implied the need for designing strategies that could improve the saving behavior, mobilization and diversification of saving by rural households. Moreover, the need for government involvement in building the capacity of rural households in terms of education and information systems with regards to savings as well as encouraging financial institutions to implement door-to-door service provisions so as to enhance saving behavior of households are desirable.
International Journal of Recent Scientific Research, 2018
Household savings is an important factor for the economic growth of the country. This study identified and examined different determinants of saving behavior of rural households and analyzed the pattern and distribution of savings related factors like the mode of saving, amount preferred for saving, attitude preferred for saving, type of saving, expectation for the future savings in Boricha Woreda of Sidama Zone, Southern Ethiopia. The data of 204 sample households was collected from rural households by using structured questionnaires, focus group discussion and key informant interview. For this study, Multiple Regression Model was employed to find out the determinants of saving behavior of households in the study area. The results ultimately revealed that age of household head, education, training, membership to cooperatives, farm and off-farm income, farm size, and livestock were significant and influencing positively rural households’ savings. Whereas saving behavior of rural households negatively influenced by expenditure, family size, and distance to savings associations. These factors therefore have to be considered in designing strategies aimed at improving the saving mobilization of rural households.
Determinants of Saving Behavior of Farm Households in Rural Ethiopia: The Double Hurdle Approach
Developing Country Studies, 2017
This study examined the factors that affect saving behavior of rural households in Benishangul Gumuz Regional Sate. The study employed descriptive statistics and double hurdle model to analyze the data collected from a sample of 325 farm households in the study area. The descriptive result showed that about 68 percent of sampled households save in the formal financial institutions where as 29 percent did not save at all. The result of double hurdle model provided empirical evidence on a positive and significant effect of age, income and education on household's decision to save; whereas household size, distance to formal financial institutions and employment status negatively influenced their decision to save. With regard to the extent of saving; income of a household, level of education, landholding size and involvement in petty trade activities showed a positive significant effect on the amount of saving; whereas household size, employment status and distance to formal financial institutions significantly reduced the amount of saving by households. The findings implied the need for designing strategies that could improve the saving behavior, mobilization and diversification of saving by households. Finally, building capacity through education and information systems in mobilizing saving as well as encouraging financial institutions to implement door-to-door service provisions to enhance saving behavior of households are desirable.
2020
The study was conducted to identify factors affecting household saving behavior of rural households in the district of Ambo district. Data for the study was collected from 370 households from two Kebeles. Both primary and secondary sources were used for this study and multi-stage sampling technique was used to contact with the study units (households). To attain the objectives of the study the researcher used both descriptive and econometric analysis. With descriptive analysis percentages, figures, graphs, charts and tables were used to present determinants of private saving. The results ultimately reveals that the Sex of the head of the household, Family size, land size, Access to credit and annual income are significantly influencing the saving behavior in the entire study area. Based on these findings, we recommend that government policy intervention should focus on increasing the availability and accessibility of financial institutions, awareness creation and education on the im...
Open Access Library Journal, 2021
Saving is the important variable in achieving financial security and growth affecting both individual and national wellbeing. However, saving level in Ethiopia specifically in rural areas is limited and less is known empirically about its factors. The general objective of this study was to characterize choice and determinants of saving in rural households' of the study area. To examine this general objective, the study employed descriptive statistics and Econometric model. Both primary and secondary data sources were used for the study. For the purpose of this study primary data collected from 327 sample households. Secondary data were also obtained from concerned financial formal and Informal financial Institution. Descriptive statistics and chi-square were applied to characterize choices of financial institution to save by the sample households. The finding of the survey result indicates that about 52.60% of the sampled households had saved their money at formal financial institutions; whereas the remaining 47.40% of the sampled households had saved at informal financial institutions. This result indicates that most of the household heads still used informal financial institution to save their money due to lack of capacity to develop and implement good savings mobilization strategies within financial institution. Econometric models of Tobit model applied to investigate determinants of rural household's savings. The Econometric model result indicated that sex of the household head's, education level, family size, average annual income, average annual expenditure, livestock ownership and access to credit service were found to have significant effect on rural households' savings. The result of this study indicated that attention should be given towards strengthening capacity building on saving mobilization strategies and expansion of financial institution to reach grassroots level rural households to improve their savings and develop culture of using formal financial institution.
Journal of Development and Agricultural Economics, 2014
This study examined the patterns of rural household savings in East Hararghe zone of Oromia National Regional State in Ethiopia. The major objective of the study was to assess the patterns and its determinants of household savings in the study area. Data were collected from a total of 700 sample households which were also analyzed using descriptive statistics and multinomial logit model. The result of the study signified that 38.5, 23.4, and 38.1% of the sample households have saved in physical assets only, financial form only, and both in physical assets and financial forms, respectively. The result from the econometric model used indicated that, credit access, contact with development agents, leadership role of household heads in the community, information access and membership in microfinance institutions have a significant impact on savings in financial forms only. Whereas, livestock holdings of household in TLU, annual farm income in Birr and leadership role of household heads in the community have a significant effect on the choice of both financial savings and physical saving forms, as compared to saving in physical form only. This study indicated that, the rural households in the study area mainly use the physical forms for savings. However, this savings in physical forms in the study area was not accessed by the formal financial system of the country. Therefore, the study recommends the physical savings of the rural households should be accessed and encouraged to augment gross domestic saving of the country.
Saving is the most important factor for economic growth. It constitutes the basis for investment, capital formation, growth and development. However, household saving behavior is mainly affected by ability, willingness, and the opportunity to save which is revealed in factors such as income, wealth, dependency ratio, education, age, occupation, interest rates and the level of financial intermediation. Thus, this survey aimed to investigate factors that determine rural households saving in Ethiopia in reference to Wolaita and Dawro Zones. To achieve the objective of the study, cross sectional community based study was employed and the data was collected from both primary and secondary sources. The primary data was collected using questionnaire and interview. The 423 sampled respondents were selected from total population using simple random sampling technique. The collected data was analyzed using simple descriptive statistics, and Tobit model was used to explore factors that affect rural household saving. The finding of the survey revealed that age and inactive family members of household were significant and negatively associated with household saving at 5 % significant level. This dictates that as one of these variables increases the households saving decreases. Households? income, total land holds & interest on saving were significant and positively associated with household saving at 5% significant level. This demonstrates that an increment in one of these variables led to increase in household saving. Therefore, it is recommended that the government and other concerned bodies should provide training for households so as to increase their level, culture and attitude of saving.
Determinants of Households Saving Behavior: Case of East Gojjam Zone, Ethiopia
Resource accumulated in the form of capital and available for current and future investment is the foundation of economic growth. Saving is one of the best mechanisms of accumulating capital. The main purpose of this study is to investigate determinants of household saving behavior living in rural and urban areas. The study was conducted in East Gojjam Zone of Amhara regional state of Ethiopia. Respondents were selected through two stage-sampling techniques, and 400 households were participated in the study. Primary data was collected from household heads by implementing household survey with in similar time interval. The collected data was analyzed using odd ratio logistic regression model. The findings of the study show that most households save their income, and personal saving habits of household head, the existence of financial planning and annual income of household determine the saving behavior of households. To improve the saving practice of household continuous training should be delivered concerning how to develop and implement financial planning, adopt positive personal saving habits and effectively manage earnings. Key words: Saving behavior, households, planning, logistic model, Ethiopia.
Saving is undeniably considered as a strategic variable in the theory of economic growth determining both individual and national wellbeing. However, saving level in Ethiopia particularly in rural areas is very low and little is known empirically about its patterns and determinants. Therefore, this study tries to assess the saving behaviors among rural household in East Hararghe Zone, Oromia Regional State, Ethiopia using survey data generated from 700 sample households. The results of this study show that 79.2% of the entire sample households had savings during the survey time. From the tobit model used for analysis, nine variables, namely household head education level, livestock holdings, access to credit service, income, investment, training participation, contact with extension contacts, forms of savings and saving motives were found to have significant influence on the amount of households savings. The results of the study shows that rural households do save irrespective of their low income mainly in informal saving institutions showing high request for accessibility potential for formal saving institutions.
Determinants of Households Saving: The Case of Shashamene Town, West Arsi Zone, Oromia, Ethiopia
The study was conducted to identify factors affecting household savings in Shashamene town. Primary data were collected using questionnaires, and secondary data sources were also collected from written documents and journal articles. The study used a random sampling technique so that each household would have an equal chance of being selected. To collect primary data, a questionnaire and a total of 381 respondents were included in the survey. To attain the objectives of the study, the researcher employed a descriptive method and logit regression model to analyse the determinants of household savings. Thirteen explanatory variables were included in the model's equation. The results of logit regression indicated that seven variables were statistically significant. Sex of the household head, age of the household head, marital status, family size, household tenure, household annual expenditure and access to credit were among the significant factors affecting household savings. From these significant variables: household head sex, age, Marital status and access to credit positively affected household savings, while the remaining variables negatively affected household savings. Two-sample t-tests and chi-squared tests were employed to compare saver and non-saver patients. Hence, efforts should be made to increase the real income of households through well-paying and better job creation by the establishment of micro-and small-scale enterprises, with the increased provision of economic and social infrastructure. Thus, stakeholder interventions to tackle the determinant factors are important measures to be undertaken.