Assessment of factors influencing the saving culture among rural households in Ibarapa East Local Government of Oyo State, Nigeria

Abstract

The study determined the saving culture of rural households in Ibarapa East Local Government of Oyo State. A multi-stage sampling technique was  used to select 200 respondents for the study and questionnaire was used to elicit information from the respondents. Descriptive statistics and Probit regression were used to analyse the data. The result shows that the mean household size was 7, an indication of a relatively large average  household size. The result of Probit regression shows a positive relationship between the income of respondents and their participation in commercial banks. However, participation of the respondents in Bank of Agriculture (BOA) is very low due to their poor awareness of the program. The result also reveals that distant to commercial banks, collateral and high interest rate hampered the respondents’ access to loan. The study recommends that activities of unorganized rural bank should be strengthened by the Government. Microfinance banks should also extend their
operational unit to rural areas to bridge the gap between the formal and informal rural financial institutions. The convectional/commercial banks as well, should extend their operation unit to rural communities.

Keywords: Saving Culture, Conventional banks, Keynesian’s hypothesis, Probit regression, Rural banking policy