Determinants of Households Saving Behavior: Case of East Gojjam Zone, Ethiopia

Resource accumulated in the form of capital and available for current and future investment is the foundation of economic growth. Saving is one of the best mechanisms of accumulating capital. The main purpose of this study is to investigate determinants of household saving behavior living in rural and urban areas. The study was conducted in East Gojjam Zone of Amhara regional state of Ethiopia. Respondents were selected through two stage-sampling techniques, and 400 households were participated in the study. Primary data was collected from household heads by implementing household survey with in similar time interval. The collected data was analyzed using odd ratio logistic regression model. The findings of the study show that most households save their income, and personal saving habits of household head, the existence of financial planning and annual income of household determine the saving behavior of households. To improve the saving practice of household continuous training should be delivered concerning how to develop and implement financial planning, adopt positive personal saving habits and effectively manage earnings.