Rural Households Saving Behavior: The Case of Wonchi District, Southwest Shewa Zone, Oromia Regional State, Ethiopia

Rural Households Saving Behavior: The Case of Wonchi District, Southwest Shewa Zone, Oromia Regional State, Ethiopia

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Title: Rural Households Saving Behavior: The Case of Wonchi District, Southwest Shewa Zone, Oromia Regional State, Ethiopia
Author: Alemu, Tadesse; Dr. Girma, Teshome
Abstract: In Ethiopia, saving rate is low and the saving culture is not well developed. Moreover, there is huge resource gap indicating the dependency of the country on external resources to finance the gap and there are few empirical studies on household saving. The objective of this thesis is to examine the saving behavior of rural households in Wonchi District, Southwest Shewa Zone, Oromia Regional State, Ethiopia using survey data collected from 124 rural households. Tobit model was used to analyze the data. Among 16explanatory variables included in the model, seven, namely education level, land owned and operated, irrigation use, farm income, non-farm income, access to credit services and training participation are statistically significant while the remaining 9 variables are not statistically significant. According to the research result, 59 (47.6%) of the households reported positive saving in the form of cash (55.9%), physical asset (18.6%) and both cash and physical asset (25.4%). The remaining 52.4% have no saving. Nearly 90% of the savers saved for precautionary spending. About 47.9% of the households with saving put money at home and 43.8% saved in financial institutions. Virtually 100% of the respondents perceived that saving is a good culture. About 96.9% of those who do not save thought that they have no asset in excess of their consumption to save. Based on the findings of the thesis, policies that promote education, training, creating access to credit services, expansion of non-farm activities, increase productivity of land and increase access to irrigation facilities to rural households will enhance rural households saving.
Description: 84p.
URI: http://hdl.handle.net/123456789/3020
Date: 2015-08


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