Role Of Savings Research Articles

The Role of Saving and Credit Cooperatives in Improving Rural Micro Financing: The Case of Bench Maji, Kaffa, Shaka Zones

Microfinance is the provision of microloans to poor entrepreneurs and small businesses lacking access to banking and related services. Saving and Credit Cooperative are the main source of finance for people who have low income level. In this study the role of saving and credit cooperatives in improving rural micro financing in Bench Maji, Kaffa, and Shaka Zones was examined. Methodologically descriptive survey research was applied. Ideological preparedness of community on saving, tool to improve members saving culture, members’ actual deposit, and loan facilities performed by cooperatives were the focuses in this study. The findings show that there is a contribution in changing the saving culture of the members, monthly deposit, and loan disbursement capacity. The challenges are shortage of finance for loan, irregularity in saving, weak collection of loan receivables, no collaboration with other financial institutions, limitation in awareness creation, and limited support of government to lower administrative level. Therefore, to fulfil the members’ financial need cooperatives have to increase the number of members, the Government should establish strong education, training, and information unit at Zone and Woreda level, without abiding cooperative rules should arrange capital injection and collaboration with Micro financial Institutions, private and public banks.

The Role of Savings and Credit in Coping with Idiosyncratic Household Shocks

This study examines the effect of access to formal banking services on households’ ability to smooth consumption in response to illness of adult workers. The institutional peculiarities of Indonesia’s largest commercial bank are exploited to separately estimate the effects of access to formal credit from savings. The means by which households smooth consumption differs depending on their access to formal services. Those with access to formal credit increase borrowing from banks, while those with access only to formal savings, but not credit, draw down on savings. Households without access to formal banking services end up liquidating productive assets.

Savings and economic growth: a historical analysis of the Cape Colony economy, 1850–1909

ABSTRACTThe savings-development nexus is a topical issue in current development literature. No study has yet explored this relationship in nineteenth-century ‘South African’ colonies. An historical analysis of the development of the savings’ trends in South Africa may assist in understanding development trends in the twentieth century. Apart from general descriptions of the nature of economic activity in the Cape Colony very little is known about the role of savings and financial sector development in the growing colonial economy. This paper describes and surveys the nature of financial markets in the Cape Colony between 1850 and 1909 and seeks to explain the relationship between savings and economic growth. Savings is defined in the broad sense of monetary and non-monetary savings and would be assumed to be a proxy for financial development in the Cape Colony. This paper contributes to the economic history literature on the colonial past of South Africa by using recently compiled data on the GDP (Greyling & Verhoef 2015) as well as monetary savings and non-monetary savings (livestock) to test whether the general view that ‘financial development is robustly growth promoting’ can be substantiated in the last half of the nineteenth-century Cape Colony. The Johansen vector error correction model technique is applied to determine the relationship between savings and economic growth. It is found that despite the expectations in the literature that financial deepening contributes to economic growth, the Cape Colony did not display such causal relationship in the period under review.

The Role of Savings and Credit in Coping with Idiosyncratic Household Shocks

AbstractThis study examines the effect of access to formal banking services on households’ ability to smooth consumption in response to illness of adult workers. The institutional peculiarities of Indonesia’s largest commercial bank are exploited to separately estimate the effects of access to formal credit from savings. The means by which households smooth consumption differs depending on their access to formal services. Those with access to formal credit increase borrowing from banks, while those with access only to formal savings, but not credit, draw down on savings. Households without access to formal banking services end up liquidating productive assets.

Implication of Financial Reforms in China and Vietnam for North Korea

North Korea’s financial system is based upon a mono-banking system, centered on the Central Bank of the DPRK. The Central Bank of the DPRK serves diverse functions - aside from financial activities, it also acts simultaneously as a central bank and a commercial bank. From the experiences of China and Vietnam’s financial reform, we draw several implications for North Korea. With the enactment of the Central Bank Law and Commercial Banking Law, North Korea has already laid the institutional foundations for financial reform. What matters is to draft and carry out specific plans for implementation, create an environment conducive to its enforcement, and to continuously put the plan to practice. It is imperative to ensure the explicit prohibition of financial asset provisions via the central bank, to guarantee the smooth transition to commercial banks taking on the primary role in savings and deposits, to acquire substantive tools for currency and foreign exchange market operation, and to stimulate both the capital and foreign currency markets.

RONALD MCKINNON’S CONTRIBUTIONS TO ECONOMICS

Ronald McKinnon contributed crucially to our knowledge of the key role of savings, investment and financial intermedication in economic growth. Financial repression by governemt spending on consumption and repressed interest rates leads to low savings which finances investment, thus slowing growth. This is Ron’s message even today. He has castigated the U.S. monetary authorities for falling into a “policy trap” of repressing interest rates, presumably to foster investment and growth. In fact, Ron points out that zero rates deter savings and thus punish both investment and growth.

Inheriting wealth in America: future boom or bust?

Chapter 1. Introduction to the Book 1.1 Prologue 1.2 Overview and plan of the book Chapter 2. Background Material 2.1 Literature review on inheritances 2.2 Household Wealth Trends, 1983 to 2010 Chapter 3. Inheritances and the Distribution of Wealth Or Whatever Happened to the Great Inheritance Boom? 3.1. Introduction 3.2. Data sources and methods 3.3 Empirical findings, 1989 - 2007 3.4 Summary and concluding remarks Appendix to Chapter 3: Questions on Wealth Transfers and Work History in the Survey of Consumer Finances Questionnaire Chapter 4. An Examination of Inheritances Using the Panel Survey of Income Dynamics 4.1 Introduction 4.2 Patterns of inheritances 4.3 Do inheritances substitute for other savings? 4.4 Concluding remarks Chapter 5. Wealth Accumulation by Age Cohort: The Role of Savings, Capital Gains and Intergenerational Transfers 5.1 Introduction 5.2 The accounting framework 5.3 Data sources and descriptive statistics 5.4 Simulation model of wealth changes by age group 5.5 Simulation results 5.6 Concluding remarks Appendix to Chapter 5: Sources and Methods Used in the Construction of Savings Rates by Age Group, 1983 to 2007 Chapter 6. Conclusions and Policy Recommendations 6.1 Summary and concluding remarks 6.2 Policy recommendations

The Establishment of New Zealand Savings Banks in Colonial Times 1840-1908

This paper examines the development of savings banks in New Zealand from 1846 through to 1908 and the role they played in the new colony. As part of the British Empire, New Zealand savings banks were modelled on the savings bank initially established by Duncan in Dumfriesshire in 1810. The Scottish model, exemplified by the savings bank opened in Ruthwell by Revered Duncan in 1810, appears to be a starting point for the Australasian variants. Like the original, the intention of the colonial banks was to provide a place where ‘working poor’ could learn and benefit from the lessons of thrift. This was not so much for thrift’s sake but in order to secure the economic future of the working classes (Bowels, 1817).This study relies on archival newspapers, archival records maintained by savings banks, New Zealand yearbooks, relevant Acts of Parliament and Parliamentary debates recorded in such as the Hansard to document the establishment and management of savings banks in New Zealand. New Zealand’s savings banks including the Post Office Savings Bank are briefly compared to those previously established in the United Kingdom. The research identifies differences between New Zealand savings banks and the previously established UK savings banks. We also document tensions that existed between New Zealand savings banks and the POSB established in 1867. This research contributes to the discussion surrounding the purpose of savings banks in that it documents the contributions made by both savings banks and the POSB in a developing colony. It also identifies the important role of savings in a pre-welfare state economy.

Savings and economic growth in South Africa: A multivariate analysis

Growth theories highlight the importance of domestic savings for Economic growth. The savings and growth literature points generally to a positive growth effect of domestic savings. For a country like South Africa, where the level of domestic saving is low, the question of the role of savings in economic growth becomes critical. An understanding of the contribution of the different forms of savings in an economy to its economic growth is important, especially to be able to make the proper policy addresses. This paper applies cointegration analysis within a multivariate framework to establish the effect of household, government and corporate savings on economic growth in South Africa. The result indicates that corporate saving has a significant positive relationship to growth in both the long and short run, while household and government saving have no significant impact on growth. There is need for policies that increase the level of domestic savings and also a need to address government policies that impact on both public and household savings rate.

The Role of SACCO in Growth of Youth Entrepreneurship in Kenya: A Case of Nairobi County

This paper presents findings from a study that focused on establishing the role of Savings and Credit Cooperatives (SACCOs) in the growth of youth entrepreneurship in Kenya. This study set out to determine whether access to finance, products and services and entrepreneurship education offered by SACCOs influence growth of youth entrepreneurship. The study used a descriptive research design where the target population comprised SACCOs that target youth owned enterprises. The findings indicate that there was increased growth of youth entrepreneurship as a result of different aspects employed by SACCOs to increase access to finance and that entrepreneurship education inculcated positive attitudes and improved business management skills. Products and services offered by SACCOs faced constraints and challenges that hindered growth of youth entrepreneurship. The study concludes that SACCOs play a key role in the growth of youth entrepreneurship and this can be enhanced through increased access to finance by youth entrepreneurs, provision of relevant entrepreneurship education and provision of quality products and services that address specific needs of youth entrepreneurs.

Workplace Characteristics and Employment of Older Workers

As aging of the U.S. population places increased demands on public programs such as Social Security, an important question is how long older Americans are willing and able to work before they retire from the labor force. While studies based on household surveys have provided information on the role of savings, health status, pension and health insurance coverage, there is relatively little information on how workplace and employer characteristics aect the employment of older workers. In this study we use linked employer-employee data to explore the relationship between the characteristics of jobs held at age 55 and early retirement. We focus on a sample of 63-year-olds drawn from the 2005-2008 American Community Survey. We match this sample to information on their earnings, employment, employers and coworkers drawn from the Longitudinal Employer-Household Dynamics data for the years in which they age from 55 to 63. We use employment status as reported in the ACS to split the sample into those those who have retired by age 63 and those who continue to work. We then examine dierences between early retirees and continuing workers in the characteristics

Crisis Tendencies in Household Savings in the Countries with Developed Market Economy and Russia

The article looks at the dynamics of household saving rates and savings in terms of numbers in some of the leading world economies during the current economic crisis, makes comparative analysis with Russia. The author examines the reasons for changes in peoples’ behavior during crisis, including the influence of pessimistic opinion regarding expenses and savings, underlines a growing role of savings «for a rainy day», describes the model of consumption behavior.

The role of savings and wealth in reducing ‘wilt’ between expectations and college attendance

‘Wilt’ occurs when a young person in high school expects to attend college but does not do so shortly after graduating. In this study we find that youth with no savings account in their own name are more likely to experience wilt than any other group examined. In multivariate analysis, young people who expect to graduate from a four-year college and have an account are approximately six times more likely to attend college than those with no account. Teens who expect to graduate from a four-year college and have designated a portion of their savings for college are approximately three times more likely to attend college than those with no account. Additionally, when savings are taken into account, academic achievement is no longer a significant predictor of college attendance. Policy implications are discussed.

The Solow Model in an Open Economy

The aim of this article is to extend the traditional Solow model to a small open economy. We focus on the role of the speed of technological progress at the moment of full opening to international capital market. We are primarily interested in two fundamental issue: firstly, what advantages may a small economy gain from its opening to the international capital flow, and secondly, what is the role of savings in the open economy growth. The considerations are based on the assumption that the interest rate is formed exogenously.

MODERN INSTRUMENTS IN RURAL FINANCING

Financial market liberalization, innovations in the area of risk management, and reductions in transaction and supervisory costs have had significant positive impacts on agricultural finance institutions. Building on these positive developments, this paper focuses on some key areas where innovation could lead to greater access to agricultural finance: warehouse receipts, collateral securitization mechanisms and supply chain finance. Creation of an enabling environment for rural finance should be a major focus of the rural development strategy of all developing countries, including Romania. A strategy should be considered in this area, as followings: it should be promoted institutional diversity while maintaining clear focus on sustainability; should be increased the role of savings and other financial services, beyond credit; should be ensured an appropriate legal, regulatory, financial environment for financial sustainability; should be underlined the need to focus on long-term results.

Interval Perception of Information and Consumer Behavior: Methodological Aspects

The article stresses the difference between objective presence and subjective perception of information by economic agents. The author considers some psycho-physiological aspects of information perception which are directly connected with the processes of economic decision-making. The article also discusses theoretical problems of modeling the perception of information about prices and quantities of goods and services on the part of consumers. Interval approach for uncertainty description is offered, the general consumer choice problem in case of interval uncertainty is formulated, and some practical issues in market price formation, the role of savings and macroeconomic equilibrium are discussed.

SI27 Substantial Reductions in Blood Product Usage Achieved Through a Multi‐Discplinary Approach

The impact of vCJD on the UK blood supply and the recently well publicised cost pressures on hospital finances make it imperative that hospitals make efforts to reduce the use of blood products. Further drivers for appropriate use of blood and blood products have come from the Department of Health [the two HSCs entitled Better Blood Transfusion (1998 and 2002)] and the National Blood Transfusion Committee [‘National Blood Conservation Strategy for NBTC and NBS’ (2004)]. Objectives can be achieved by a multi‐disciplinary approach with education, ongoing audit and collaboration between the laboratory based staff and all clinical staff. Substantial reduction in the use of blood products can be achieved with the resultant reduction in financial costs and reduction in some of the undesirable effects of transfusion. The Royal Free NHS Trust is a teaching hospital and a tertiary referral centre for haematology, hepatology and nephrology. An extremely active transplantation programme is associated with all three specialities. A multi‐disciplinary approach to blood sparing strategies resulted in a 12.33% reduction (447 K) in blood product contract value. A 9.5% reduction (1680 units) in red cell use was in excess of national averages, greater reductions of 16.8% for FFP (1313 units) and 23.9% (960 units) for platelets were achieved against a background of increased bone marrow transplant activity and greatly expanded renal activity. The substantial reduction in platelet consumption coincided with a more dramatic 79.2% reduction (160 units) in the use of HLA selected platelets for refractory patients. The major contributions to savings involved the close monitoring of blood products, particularly in bone marrow transplant recipients and renal dialysis patients. The increasing use of mini‐allo bone marrow transplants with subsequent rapid recovery of platelet increments, also played a major role in savings. Established protocols for liver transplantation include the use of thromboelastogram (TEG) and aprotinin in selected cases. A pilot study for point of care testing delivered encouraging results. Future initiatives include the expansion of cell salvage to other surgical procedures or haemorrhage scenarios and the use of Erythropoietin (EPO) in some malignancies. Point of care testing is to be expanded to cover more surgical procedures and provide a more accurate assessment of haemostasis closer to real time.

Underground banking in Malaysia: a case study of ROSCAs

PurposeTo provide arguments in favour of legalising rotating savings and credit associations (ROSCAs) as they play an important role in savings and credit for women in Malaysia.Design/methodology/approachThe paper refers to previous studies on ROSCAs in Malaysia and extracts information that shows that ROSCAs are used mostly by women as a method of forced‐savings, credit and insurance against uncertainties. It suggests different methods that can be used to make ROSCAs more efficient. Finally, it provides suggestions for amendments to existing legislation which will not interfere with the social structure that supports ROSCAs, yet permit participants to sue defaulters.FindingsThe findings show that ROSCAs are widely practised in Malaysia especially in the rural and suburban areas. The participants are mostly women from middle income and low‐income groups who used it as a form of savings or credit. The benefits of permitting ROSCAs outweigh the risks. Legalising ROSCAs will not remove the benefits but will substantially reduce the risks.Originality/valueThis paper provides arguments to legalise ROSCAs in Malaysia and provides suggestions to ensure greater efficiency and a lower default rate. It also suggests amendments to the legislation to enable participants to take quick and cheap legal action against defaulters.

Roy Harrod and Joan Robinson on Thriftiness and Growth: An Introduction to Their Correspondence, 1965-1970

While Roy Harrod refrained from expressing publicly his views on Joan Robinson’s theory of accumulation, Robinson reviewed Harrod’s 1936 The Trade Cycle and his 1948 slim volume Towards a Dynamic Economics (Robinson 1949), included him in a survey of some expanding economy models in 1952, dedicated to his dynamics one of the final notes of her Accumulation of Capital (Robinson 1956, pp. 404-6) and an essay on the knife-edge (1965), commented upon Harrod’s theory of growth after 21 years of debates generated by his landmark book (Robinson 1970a), and returned to his theory in Economic Heresies (Robinson 1971, pp. 109-16). Harrod reacted to one of these contributions (Harrod 1970), but only to complain of misunderstandings and underline the differences between his own approach as he saw it and Robinson’s rendition. As the printed discussion is one-sided, so is the surviving correspondence on growth between Harrod and Robinson. It consists of two sets of exchanges dated 1965-66 and 1969-71, occasioned by Robinson’s comments on Harrod’s review of Kaldor’s Essays on Economic Policy (Harrod 1965) and by Robinson’s 1970 article for the Economic Journal on ‘Harrod after 21 Years’. In both cases, the main topic under discussion was the role of savings in Harrod’s dynamics, with a wider range of details of Harrod’s construction being discussed in the second exchange. This correspondence reveals the almost complete lack of communication between these two authors, who struggled to get their message across but failed not only to convince their opponent but also to have him or her appreciate what the point under discussion was. The protagonists’ frustration notwithstanding, such exchanges are precious for historians of economic thought (especially when the antagonists share a common background), as they give several clues – often missing from the published debates – as to what the real bone of contention was, and hopefully point at the specific impediment to mutual understanding. This introductory essay aims at placing this exchange in its historical context, and at offering some clues as to the roots of the differences in perspective between Harrod and Robinson that led to this tangled situation.

Estimation of Saving Behaviour in Pakistan Using Micro Data

The role of savings in investment and therefore in the development of a country cannot be exaggerated. In poor countries like ours most of the savings is done by households. In this paper the saving behaviour of Pakistan households, broken down to rural-urban, is examined. Using HIES 1998/99 and utilising OLS, it has been shown that saving behaviour in Pakistan is influenced by various factors including wealth, employment status, education, age and dependency ratio. But the most import role in influencing saving behaviour is played by household income.