Abstract
This study tried to analyze determinants of saving behavior and the decision to save of women entrepreneurs engaged in micro and small enterprises (MSE) in Addis Ababa. Descriptive statistics and the Tobit model were used to analyze data collected from 500 respondents working in 6 Woredas of Addis Ababa. The findings of the descriptive analysis showed that the mean annual savings were found to be 7894.32 birr out of the mean annual income of 32461.9 birr for the year 2019. Average propensity to save is 0.24 birr. Moreover, lack of market for products or services, lack of sufficient working capital, and inappropriate working place are the main challenges of saving which faced women entrepreneurs. From the Tobit model econometrics, the number of workers, annual income, enterprise types, and access to credit, access to market, and age of business, are statistically significant determinants of the amount of saving and the decision to save. The marginal effects after the Tobit result also indicate that the predicted value of the dependent variable (amount of saving) among savers is about 9140.61birr and the likelihood of women to save is about 65.5%. Therefore, the findings of the study imply that strong and consistent support from the government ,widening alternative sources of finance, improve working areas, training, and building a market network with consumers and producers will play an important role to enhance saving behavior and the decision to save of women entrepreneurs in Addis Ababa Keywords: Women entrepreneur, saving, Tobit model, saving determinant, Addis Ababa DOI: 10.7176/JESD/12-20-01 Publication date: October 31 st 2021
Highlights
Promoting saving has been the concern of the Government of Ethiopia for several years especially in Growth and Transformation Plan 1 and 2 (GTP1 and GTP2)
5.4 Econometric Results 5.4.1 Determinants of saving amount and decision to save The result of the Tobit model in identifying determinants of savings is presented in terms of marginal effect (Table 5.4) because it is meaningless to interpret the coefficients of the Tobit result as it is
The econometrics analysis result showed that annual income 2019, access to credit, number of employees, access to market, age of business, and enterprise types had a significant relationship with the decision to save and amount of saving
Summary
Promoting saving has been the concern of the Government of Ethiopia for several years especially in Growth and Transformation Plan 1 and 2 (GTP1 and GTP2). More than all, saving is the main source of credit for micro and small enterprises This is because Micro and Small Enterprises (MSE) are important economic sectors for reducing unemployment and fostering economic growth at the national and regional levels. Their importance and significance are because micro and small businesses are the fundamental basis for building a competitive and all-rounded business environment, as well as they are the basis for transforming agricultural development-led strategies into industrial development strategies
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