Abstract:
The saving participation of daily laborer are determined by social, cultural,
economic and institutional factors. This study investigated the determinants of
saving participation among daily laborers in Ambo town, Ethiopia, employing a
mixed-methods approach. The research combined quantitative analysis through a
robust logistic regression model and qualitative insights gained from focus group
discussions (FGDs) and personal observations. Both primary and secondary data
sources were used to obtain the data. A total 165 respondent samples were
selected through a convincing sampling method and administered and returned
the survey questionnaire. The descriptive analysis results revealed that out of the
165 daily laborer respondents, 94 (56.97%) were savers, while 71 (43.03%) were
non-savers. The logistic regression model explained an impressive 85.8% of the
variation in saving participation, providing robust evidence on the key factors
influencing the saving behavior of this population. The results revealed that family
size, share of expenditure from income, training on saving and financial literacy
were statistically significant predictors of saving participation. Specifically, the
analysis showed that individuals from larger families, those with a lower share of
expenditure from income, those who had received training on saving, and those
with higher levels of financial literacy were more likely to participate in saving
activities. Conversely, variables such as sex, age, marital status, educational
background, religion, perception about interest rates, access to financial services,
and daily income did not have a significant impact on saving behavior. The
qualitative findings from the FGDs and personal observations complemented the
quantitative results, providing valuable insights into the daily laborers' saving
practices and the challenges they face in saving. This study provides robust
evidence on the key determinants of saving participation among daily laborers in
Ambo town, contributing to the growing body of research on financial inclusion
and saving practices in low-income communities. The absence of any formal
financial education or training further compounded their difficulties in building a
saving culture. The insights gained can inform the development of evidence-based
policies and programs to promote financial inclusion and enhance the financial
security of this underserved population.
