Factors Affecting Saving Behavior Of Rural Households: The Case Of Chommen Guduru District, Horro Guduru Wollega, Oromia, Ethiopia.

Abstract

This study examined factors affecting Saving Behavior of Rural Households of Chommen Guduru district. Specifically, the study tried to examine the effect of age, marital status, educational level, sex, family size, religion of the head of the household, income of households, expenditure pattern, landholding size, access of market, access of financial institution and access of training and awareness creation on rural households’ savings behavior. The data was collected through survey questionnaire. Out of the 321 questionnaires distributed to sampled households, 276 were properly completed and returned. This represents a response rate of approximately 85.98% from the distributed questionnaires. For the purpose of the study a cross sectional data were collected from 276 sample households and both primary and secondary data were used. Interview schedule were used to collect primary data from the sampled households and saving and microfinance institutions. To analyses the data, descriptive statistics and Binary logistic regression model were used. The descriptive results of the study showed that 52.17% of the sampled households had savings in formal financial institutions during the survey time where as 47.83% of the sampled households had no saving in formal financial institutions. Moreover, the study found that household head’s education levels, access to formal financial institution, income, land size, land fertility, family size and distance from market were found to have significant factors affecting positively on rural households’ saving behavior while market distance and consumption expenditure were found to have significant factors affecting negatively on rural households’ saving behavior. Based on these findings, the researcher recommended that emphasis should be given towards financial and educational strategies to improve the rural households’ agricultural productivity and creating accessibility of financial institutions near to the rural households’ residences to promote their saving behavior