Determinants of Saving Decision on Fixed Deposits in Non-Bank Finance and Leasing Institutions in Sri Lanka

Abstract

The objective of this article is to identify the determinants of saving decisions on fixed deposits. The effect of customers' prior experience with Non-Bank Finance & Leasing Institutions (NBFLI) has been investigated as a mediation factor. Structural Equation Modelling (SEM) in AMOS has been used to analyze the results and confirmed the results by using the bootstrap technique of SEM. The results show that the stability of the NBFLIs, security for the fund, interest rate of the fixed deposits, and quality and reliability of the service directly affect the decision to save fixed deposits. The institution's geographical location has not directly affected the decision on fixed deposits. The factors of the security, interest rate, quality, and reliability of the service have an indirect effect on the decision of saving fixed deposits with prior experience, except for the factor of stability of the institutions.