Bridging the Gender Gap in Household Saving Practices: Unveiling Determinants and Pathways to Financial Inclusion in Iringa, Tanzania

Abstract

This study investigates the determinants of gender disparity in saving behaviour among households in Ruaha Ward of Iringa Municipality, Tanzania. The study is navigated with the theory of Life-Cycle, Keynesian Absolute Income and Permanent Income. A cross-sectional research design was employed, in which data from randomly selected 192 respondents were collected through questionnaires, checklists, and reviews of relevant documents. The population targeted by this study was 11,941 people, from which a sample of 196 respondents was drawn. Data analysis applied Chi-Square, Multinomial Logit Model, Hierarchical Linear Modeling (HLM and Interaction Effects and Moderation methods. Chi-Square results indicated significant associations for sex (12.45), education level (14.30), and household size (18.24) with serving behaviour. Multinomial Logit model results indicated that employment status and age were significantly (p=0.05) influencing saving behaviour. The Hierarchical Linear Modeling (HLM) results revealed that gender negatively affects saving behaviour (β = -0.321, p = 0.008). This shows that women save less than men. Age positively correlates with saving (β = 0.053, p = 0.009) which supports the life-cycle hypothesis. Whereas education (β = 0.183, p = 0.046) and employment (β = 0.398, p = 0.004) significantly increase savings, income (β = 0.000, p = 0.655) is not significant. Financial literacy at the household level (γ = 0.501, p = 0.005) in addition to access to financial services (γ = 0.378, p = 0.018) promote saving. Conversely, household size (γ = -0.222, p = 0.067) negatively affects it. The interaction analysis shows financial literacy amplifies the income-saving link (β = 0.004, p = 0.046) while larger households reduce women's savings (β = -0.075, p = 0.014). Furthermore, the model fit (pseudo R² = 0.220, LR Chi² = 145.300, p = 0.000) confirms strong explanatory power. The study concludes that there is association between demographic characteristics with saving behaviour, socio-economic factors both individual-level factors and household-level variables play critical roles in shaping saving behaviours. The interaction effects results show the relationship between income and saving behaviour is stronger when financial literacy is higher, and older, employed individuals are more likely to save. Recommendations are made on enhancement of saving behaviours across diverse demographic groups, promotion of financial literacy programs, particularly targeting lower-income and vulnerable populations, addressing gendered financial disparities, especially within larger households and formulation and implementation of robust policies for emphasizing financial planning, budgeting and savings.