Abstract:
Saving is greatly contributing for economic growth at individual, communities, national and
international level. Nevertheless, inappropriate management of the resources is extremely
deterred the development of individual capital as well as the country, particularly the least
developing country like Ethiopia, where the saving habit and system is poor. The objective of the
study is to determinants of household saving means improving saving of households. The data
were collected 354 households from five Kebeles, concerned offices and organization using
structured questionnaire and interviews. Both descriptive and econometric analysis employed
analysis to collected data. With descriptive analysis percentages, figures, graphs, charts and
tables were used to present determinants of household saving and in logistic regression analyses
the variables that are positively related with the probability of household saving are household
head age, sex, credit and monthly income. The variables that are negatively related with the
probability of household saving are family size, household education, marital status, interest rate
and monthly expenditure. From nine explanatory variables, four of the variables: family size,
credit access, monthly income and monthly expenditure have a significant effect on households
saving. To increase the saving of households, the following recommendations should be
implemented by the concerned bodies: first, income is the major determinant of saving then, due
attention should be given to increase income of households. Income could be increased by
implementing policies that increases the employment opportunities and reduce underemployment
and concealed unemployment. Second, family planning and related measures should be taken to
limit household family size. Third, to reduce expenditure, awareness should be given to
households in study area. Finally, In order to save or solve problems of saving:- often compare
prices before they make a purchase, consider whether the real necessity before make a purchase,
always follow a careful monthly budget, high income level, to control market , to reduce
inflation, to create job opportunity, properly uses addiction and other.
