Determinants of Households Saving Capacity and Bank Account Holding Experience in Ethiopia: The Case of Dessie Zuria Woreda

摘要

This research has been an attempt to identify the major determinants that affect households saving capacity and their experience of adopting formal financial institutions (banks) in the case of Dessie Zuria Woreda. To do so, an individual base cross-sectional data analysis along with the two stage sampling technique of both purposive and random sampling technique was undertaken. To analyze the data, the study employed two sets of models (logistic and the method of principal component analysis). The econometric results of the study indicates that determinants like lack of credit access, lack of financial planning, complexity of banking system, monthly expenditure on stimulants, sex, significantly and negatively affects households saving capacity, but monthly income, age, bank account holding experience, marital status, and occupation positively and significantly affects saving capacity. In similar fashion, determinants include improper government policy, weak institutional set up, complexity of banking system, distance in Km away from their home to financial institutions, and religion significantly and negatively affect the probability of households to be banked, on the other hand, sex of households, credit access, income, marital status, education and age positively and significantly affects the probability of households to be banked. It found out that the saving rate of banked households was higher than unbanked households. Thus, appropriate strategies and programs should be formulated to enhance saving rate as well as households tradition of adopting formal financial institutions.