Determinants of individual savings among Tanzanians

Abstract

Purpose Savings help to provide for future personal and households needs. The purpose of this paper examined Tanzanians’ determinants of saving. It studied the relationship between individual characteristics (gender, marital status, age, education level and financial education) and saving behaviour. Design/methodology/approach The paper used 2017 national baseline survey data with 8,959 observations from all over Tanzania. Descriptive analysis and econometric models were used to test the developed hypotheses. Findings Descriptive results show that Tanzanians mainly associate saving with setting money aside to keep it safe for future use. The results also show that most Tanzanians keep their money at home – a very informal way of saving. The results indicate that age and education level are key characteristics that determine positive saving by Tanzanians. Research limitations/implications This study used FinScope survey data which was limited to Tanzania. Since FinScope surveys are done in other African countries, using similar methodologies, it would be interesting to investigate similar trends in other contexts. Practical implications The study recommends promoting awareness of saving in formal institutions. This will benefit not only customers but the financial institutions and mobile telecom companies themselves. Originality/value This study contributes to the life-cycle theory by showing how families, societies and exposures influence individuals to save. Gender and marital status seem to play a lesser role than social- and exposure-related aspects of age and education. Exposure and social interactions are key determinants in the attitude to saving.

Examining Factors of Savings Behaviour Among Malaysian Youth

“…For economists, savings means using a certain amount of a resource less so that individuals can use more in the future. Hence, saving involves delaying consumption and storing the postponed consumption in some type of asset (Mori, 2019). Furthermore, Domar (1946) and Tang (2010) assert that the pace of long-term economic growth is contingent on the capacity for savings.…”

“…Therefore, a country needs adequate savings for an economy to develop enough productive investment, as saving is the primary source of capital formation (Kumarasinghe, 2017). Subsequently, according to Mori (2019), saving methods can include putting money into a savings account, retirement account, mutual fund, or cash. Now that money is being put aside, saving means cutting back on spending.…”

“…Savings also serve the purpose of addressing unexpected financial requirements and constitute a portion of an individual's income (Mori, 2019). Under such circumstances, individuals can improve their living standards when high savings lead to wealth accumulation (Gokhale, 2000).…”

The Influence of Financial Literacy, Financial Attitude and Peer Influence Toward Retirement Saving Behavior Moderated by Gender: A Case in Indonesia

“…Meriküll, Kukk, and Room (2021) stated that many females save more in deposits while male save more in riskier financial assets that have more profits in a long-term return. Mori (2019) stated that saving is defined as using less than a specific quantity of resources in order to consume it later, in order to build up savings for future expenditure. Hauff, Carlander, Gärling, and Nicolini (2020) stated that retirement financial behavior consists of three stages which are retirement planning, retirement financial savings, and financial investment activity.…”

Examining the Impact of Socioeconomic Factors on Academic Staff Saving Behaviors and Financial Readiness in North Wollo Zone, Amhara, Ethiopia

“…Previous research emphasizes the importance of prioritizing saving practices in various areas, including education, consumption, healthcare, family support, job creation, and income generation, particularly in southern Ethiopia [9]. Examining the savings services utilized by individuals in the community has been shown to enhance their saving behaviours [10]. To address this, it is essential to involve governmental entities and implement recommended saving strategies within households, institutions, and sectors of the community.…”