Understanding the Factors that Influence Saving Decision among Small Business Owners in the Greater Accra Region, Ghana

Abstract

This paper seeks to understand the factors that influence saving decision among small business owners in two municipalities in the Greater Accra Region of Ghana, using the probit model. Through a multi-stage sampling technique, data was collected with the aid of structured questionnaire from 304 small business owners in the study areas. Results indicate that with different saving plans, 81 percent of the respondents have savings account and actually save, with majority of this proportion saving about GH¢16.00 daily. Interest rate on savings, knowledge about savings, available saving schemes to benefit from as well as motive of future purchase are the main factors that are more likely to positively and significantly influence saving decision of small business owners. Policy measures directed at providing small business owners with financial literacy on saving are recommendable. Also developing tailor-made saving products for small business owners to benefit from and increasing interest rate on savings should be considered.

Keywords: saving decision, small business owners, Greater Accra, Ghana