Determinates of Personal Saving of Financial Institution Staff in Ethiopia: Case Study of Micro Finance Institutions (MFI) in Wolaita Sodo Town

Garedew Ganecho Gebremedihin


Main objective of this research is to examine the determinants of personal saving of micro finance staff in Ethiopia, specifically in soddo town. it focused study the relationship between independent variable (personal saving) and dependent variables (behavioral characteristics of staff, financial literacy, continues increase inflation, government taxation, deposit interest rate, wealth). many finding confirms that saving habits in Ethiopia generally poor; to solve this problem descriptive research design and multiple linear regressions model was applied in this study and entire employees are taken from institution to gather research information. Primary data collected from 52 staff members, by using open and close ended questioner. The finding of the research shows that majority staff saving amount is between 1% up to 5%, which is not adequate to cover future financial difficulties. From tasted dependent variables; behavioral characteristics of employees, financial literacy, deposit interest rate and wealth has positive significant relationship between the independent variable and inflation rate has negative significant relationship. Only government taxation has insignificant positive relationship with personal saving. Financial literacy and behavioral characteristics of employees are the major determinants of personal saving due to the strongest relationship with independent variable.  To increase personal saving habit of staff; awareness as well as commitment for saving must be increased. Also micro finance institution should increase interest rate for deposit to motivate saving.

Keywords: Determinates, MFI, Personal saving

DOI: 10.7176/RJFA/10-9-01

Publication date:May 31st 2019

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