Antecedents of Savings Behaviour Among Rural Households: A Holistic Approach

Abstract

The main purpose of this research is to empirically examine the antecedents of household savings behaviour in the Metekele, Beneshangu Guzu state of Ethiopia. In this study, three broader factors (household characteristics, socio-economic variables and institutional variables) influencing savings decisions of households have been identified and examined. This study followed mixed method research design with questionnaire and in-depth interviews as the main instruments. Binary logistic regression has been mainly utilized to analyse the quantitative data. The findings revealed age, educational level, family size, number of livestock unit, income, irrigation utilization, production season, participation in non-farm activities, use of credit, training and education significantly impact savings behaviour. However, sex, religion, marital status, land ownership and expenditure were found insignificant contributors to the model. The government and concerned parties should support more for the decision to save by facilitating and undertaking training on saving options, conducting regular review and monitoring to develop a clear policy on the importance of savings specifically for households on habit of regular savings.

Impact of financial literacy and financial confidence on the savings behaviour of the farmers: the Indian scene

“…It primarily happens because educational attainment and income level improve with increasing age and consequently the ability of the individual to save is also enhanced. The outcome of the study indicated that the likelihood of savings steps up with increasing age which is consistent with the findings of the studies carried out by Murendo and Mutsonziwa (2017), Bhat et al (2022) and Kibet et al (2009). However, the variable age did not emerge as a significant variable.…”

“…It can be noticed that the savings behaviour of the farmers varies at each level of educational attainments. Empirical evidence suggests that farmers who have completed formal education are more likely to save regularly as compared to farmers who have no formal education (Bhat et al. , 2022).…”

“…The extant literature indicated the existence of present and future family financial responsibility-induced disciplined savings behaviour among married individuals (Bhat et al. , 2022).…”

“…With the help of savings, farmers can invest in machinery, irrigation and other agro infrastructure, which will improve their operations and boost production, leading to larger profit margins. That in turn will amplify the farmer's ability to obtain credit from banks and microfinance institutions easily (Bhat et al, 2022). There is a common perception that poor people, and rural households, in particular, have little capacity to save beyond their basic needs.…”

“…(2020) noticed that the size of the farm and output improve the saving behaviour of small-scale farmers in Poland. Bhat et al. (2022) observed that education, number of livestock, irrigation facility, production season, use of credit, participation in non-farm activity and land size significantly determine the savings behaviour of rural households in Ethiopia.…”