Exploring Household Saving Practices: Is Tanzania different?

Abstract

Household saving in developing economies is influenced by various factors that causes a decline in the amount of saving despite the importance of saving to household development. Given that saving is highly a personal matter, strategies to encourage saving cannot be uniformly applied. While individuals have distinct needs, preferences, habits, and motives, this study seeks to explore the typical determinants of household saving in Tanzania. Data was collected through questionnaires administered to the heads of four hundred (400) households across twenty two (22) wards in Mbeya City. The study examines saving as a function of several variables including age, sex, education attainment, marital status, monthly income, number of dependents and social influence.  Using logistic regression models, the results indicate that monthly income is the most significant determinant of saving, followed by education attainment, number of dependents, social influence, sex and age. Despite its importance, saving practices remain suboptimal. Based on these findings, the study recommends that saving advocacy should begin at the family and school levels to increase the proportion of individuals who actively save.