Year-end Sale % OFF 
Abstract
This study examined the patterns of rural household savings in East Hararghe zone of Oromia National Regional State in Ethiopia. The major objective of the study was to assess the patterns and its determinants of household savings in the study area. Data were collected from a total of 700 sample households which were also analyzed using descriptive statistics and multinomial logit model. The result of the study signified that 38.5, 23.4, and 38.1% of the sample households have saved in physical assets only, financial form only, and both in physical assets and financial forms, respectively. The result from the econometric model used indicated that, credit access, contact with development agents, leadership role of household heads in the community, information access and membership in microfinance institutions have a significant impact on savings in financial forms only. Whereas, livestock holdings of household in TLU, annual farm income in Birr and leadership role of household heads in the community have a significant effect on the choice of both financial savings and physical saving forms, as compared to saving in physical form only. This study indicated that, the rural households in the study area mainly use the physical forms for savings. However, this savings in physical forms in the study area was not accessed by the formal financial system of the country. Therefore, the study recommends the physical savings of the rural households should be accessed and encouraged to augment gross domestic saving of the country. Key words: Saving patterns, household savings, east hararghe zone, oromia, Ethiopia.
Highlights
It is evident that, saving is an important variable at national, private and household levels in contributing for economic growth (Schultz, 2005; Nga, 2007)
The proportional to size (PPS) is used to determine proportional allocation under which the sizes of the samples from the different cluster are kept proportional to the sizes of the cluster (Kothari, 2004)
Households with more livestock holdings and annual farm income would like to save in both financial forms and in kinds as they increase the saving ability and opportunity of households
Summary
It is evident that, saving is an important variable at national, private and household levels in contributing for economic growth (Schultz, 2005; Nga, 2007). Low saving has been a dominant feature of many developing countries (Deaton, 2005; Zhu, 2004). In. Ethiopia, the average share of gross domestic savings during the year of 1980 to 2012 was 12.4% of GDP creating the average resource gap of 6.1% during these years (EIA, 2010). Rural households in Ethiopia in general and the study.
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