An assessment of the factors that influence household savings in Eastern Uganda

Abstract

Savings play an important role in economic development process, has been neglected very much in favor of credit in rural communities particularly in developing countries. Again this study sought to assess the determinants of household savings in Eastern Uganda. The study included 728 households from Eastern Uganda. Findings from the study revealed that majority of the households (86%) were rural based and were mostly headed by males (55.5%). The study revealed that gender of the household head, education level of the household head and main source of income of the household head were associated with household saving while place of residence, marital status and household size were not associated with household saving in Eastern Uganda. Following the findings, the study recommended government and nongovernmental organizations to provide regular, timely and need based capacity building trainings for household savings through VSLA and SACCO participants; Link VSLA and SACCO participants with formal microfinance institutions; conduct regular monitoring and follow ups by concerned government body; different concerned stakeholders in the sub-region including government, nongovernmental organizations, microfinance institutions and others need to work in coordinated manner to solve the recurrent challenges of VSLA and SACCO participants in Eastern Uganda and finally government and/or nongovernmental organizations need to take best practices and lessons from existing households saving methods like VSLAs, Mobile money SACCO and expand their initiative to address more impoverished households.