Determinants of Household Heads’ Saving Behaviour in Upper East Region: A Case Study in Zebilla

Abstract

In developing economies of which Ghana is no exception, extant literatures agree that savings level of households is relatively low. There have also been limited studies in Ghana on the relationship between non-macroeconomic factors that influence personal savings. The main purpose of this study was to analyse the factors that affect the savings behaviour of household heads in Zebilla in the Upper East region of Ghana. They assessed the influence of demographic, cultural factors, financial literacy, psychological factors and social factors on the savings behaviour of heads of households in Zebilla after collecting data from 367 household heads using questionnaire survey. The least square regression results revealed that age and household size negatively influence savings behaviour while income and educational level positively influence savings behaviour. The study also found positive relationship between motivation, perception, learning and attitudes and savings behaviour of household heads. Financial literacy, cultural practices and social factors such as influence of the family and the role and status of household heads in the family and community were also found to have significant positive impact on the savings behaviour of household heads. The study among other things recommended that policy makers such as the government should not only consider the macroeconomic factors but also the socio-cultural, psychological, demographic factors and financial education of individuals should be considered when designing frameworks for improved personal savings.