Determinants of rural household saving

Abstract

This study examined factors that affect saving behavior of rural households in North Shewa Zone, Oromia Regional Sate. It employed descriptive statistics and to analyze the data collected from a sample of 400 rural households in the study area. The result showed that about 83.4 percent of sampled households involved in saving of which 23.75 percent use formal financial institutions and the remaining other alternative saving options. The findings implied the need for designing strategies that could improve the saving behavior, mobilization and of saving by rural households. Moreover, the need for government involvement in building the capacity of rural households in terms of education and information systems with regards to savings as well as encouraging financial institutions to implement door- to-door service provisions so as to enhance saving behavior of households are desirable.