Factors Affecting Rural Households Saving: the case of Buno Bedele zone Bedele District, Oromia Regional state

Abstract

The objective of this study is to examine the factors affecting household savings in rural areas. Bedele District is one of the districts of Buno Bedele Zone, Oromia Regional State. It is one of the most productive areas especially in Coffee, Maize and Teff production. The total number of population of Bedele district is211100 of which 101000 lives in rural areas while 110100 lives in urban areas. Among the rural dwellers, 52200 are males and 48800 are females. In addition to this, there are 27842 rural households among these 19868 are male and 7974 are female headed households. This study is initiated with the objective of identifying forms of savings used by rural households and identifying major factors affecting rural households’ savings. Based on the explanatory research design, the study applied mixed approaches. For the purpose of the study a cross sectional data were collected from 188 sample households and both primary and secondary data were used. Interview schedule were used to collect primary data from the sampled households. For the purpose of data analysis, descriptive statistics (frequency distribution, cross tabulation), chi-square test, p-value test and Binary logit econometric model were used. Inferential statistical techniques such as correlation and regression analysis were employed to test the hypotheses of association and differences. Collected data were processed using the Statistical Package for Social Science (SPSS) of version 20. The finding of this research revealed that, Religion, Education level and distance have negative and statistically significant effect on saving of households. The total family of household & Landholding size have positive contribution for household savings and statistically significant. Finally, Sex, Age, Marital status, Occupation, Dependent family, Monthly income, and Livestock ownership of households have statistically insignificant effect on saving of households.