The Determinants of Households Having Savings Accounts in Rwanda

Abstract

This paper analyses the determinants of Rwandan households having savings accounts using Integrated Household Living Conditions Survey  (IHLCS) data of 2010/11. After a background discussion and literature review an empirical analysis is presented with different variables adopted and analysed as determinants of household’s head having savings accounts. Poverty level, age, gender, residential area and level education of household head (literate or not) were considered as independent variables of the study. Findings from the estimations of logit models indicate the likelihood of a household having a savings account is positively and significantly related to each of the following: non-poor status of the household,
the household residing in an urban area, the household head being male, and the household head being literate. Having the household head be literate tends to be more important for younger household heads and for non-poor households. The proportion of households having money in a savings account more than doubled over the decade between the IHLCS 2000/2001 survey and the IHLCS 2010/2011 survey. Government policies on savings and poverty reduction may explain the trend of increased cash balances in saving accounts.

Key Words: Savings, Bank Accounts, Households, Determinants,