The Determinants of Households Having Savings Accounts in Rwanda

Abstract

This paper analyses the determinants of Rwandan households having savings accounts using Integrated Household Living Conditions Survey (IHLCS) data of 2010/11. After a background discussion and literature review an empirical analysis is presented with different variables adopted and analysed as determinants of household’s head having savings accounts. Poverty level, age, gender, residential area and level education of household head (literate or not) were considered as independent variables of the study. Findings from the estimations of logit models indicate the likelihood of a household having a savings account is positively and significantly related to each of the following: non-poor status of the household,the household residing in an urban area, the household head being male, and the household head being literate. Having the household head be literate tends to be more important for younger household heads and for non-poor households. The proportion of households having money in a savings account more than doubled over the decade between the IHLCS 2000/2001 survey and the IHLCS 2010/2011 survey. Government policies on savings and poverty reduction may explain the trend of increased cash balances in saving accounts.
 Key Words: Savings, Bank Accounts, Households, Determinants,

Status and determinants of saving behavior and intensity in pastoral and agro-pastoral communities of Afar regional state, Ethiopia

“…When formal financial institutions were found far away from the household’s residence, there will be a higher risk associated with cash movement, difficulty to access the benefit and updated financial service information, and higher transaction costs. This result is consistent with the results: [ 13 , 22 , 33 , 43 , 52 ].…”

“…According to Table 4 , the likelihood of being saved reduces by 33% when livestock ownership increases by one TLU. This finding is similar to a studies of [ 23 , 33 ]. The interest rate was an insignificant determinant for both probability and intensity of saving.…”

“…As year of schooling increases by 1 grade, the probability of households being savers will be induced by 23%. This is in line with the findings of [ 22 , 33 , 43 , 49 ]; whereas, contrast with [ 24 ].…”

“…The second analysis was done using the econometric analysis approach to examine the determinants of the decision to save and the intensity of saving. The common approaches of modeling decision and intensity of saving are the Tobit [ 31 , 32 ], Heckman, and double-hurdle models [ 22 , 33 ]. However, in this study, we have used double-hurdle models to analyze the decision and intensity of saving in this study area.…”

“…This model is a generalization of the Tobit, where the participation and quantity decisions are determined with two separate stochastic processes. In the first stage, applied the first hurdle (probit model) to analyze the saving decision of sampled households, and the second stage used a truncated regression model to analyze the extent(amount) of saving [ 22 , 33 ].…”