DETERMINANTS OF SAVING AMONG RURAL HOUSEHOLDS IN ETHIOPIA: THE CASE OF WOLAITA AND DAWRO ZONE, SNNPR.

Saving is the most important factor for economic growth. It constitutes the basis for investment, capital formation, growth and development. However, household saving behavior is mainly affected by ability, willingness, and the opportunity to save which is revealed in factors such as income, wealth, dependency ratio, education, age, occupation, interest rates and the level of financial intermediation. Thus, this survey aimed to investigate factors that determine rural households saving in Ethiopia in reference to Wolaita and Dawro Zones. To achieve the objective of the study, cross sectional community based study was employed and the data was collected from both primary and secondary sources. The primary data was collected using questionnaire and interview. The 423 sampled respondents were selected from total population using simple random sampling technique. The collected data was analyzed using simple descriptive statistics, and Tobit model was used to explore factors that affect rural household saving. The finding of the survey revealed that age and inactive family members of household were significant and negatively associated with household saving at 5 % significant level. This dictates that as one of these variables increases the households saving decreases. Households? income, total land holds & interest on saving were significant and positively associated with household saving at 5% significant level. This demonstrates that an increment in one of these variables led to increase in household saving. Therefore, it is recommended that the government and other concerned bodies should provide training for households so as to increase their level, culture and attitude of saving