Factors influencing personal savings in women groups in kenya: a case of voluntary savings groups in machakos county

Abstract

At the macroeconomic level, individual saving benefits the entire nation. Saving has a positive impact on the economy because funds that are placed in financial assets are then channelled through financial intermediaries to fund investments by firms. Subsequently, investments by firms will ultimately benefit the nation through higher productivity and economic growth. Furthermore, high savings can also hedge countries against economic downturns and financial crisis. One of the avenues to boost national saving is by encouraging individuals to increase personal savings. The role of savings in investment and therefore in the development of a country cannot be exaggerated. In developing countries like kenya, most of the savings is done by households. In this study the behavior of women savings in voluntary saving groups in machakos county was examined. However, savings among women in groups in machakos county have been wanting and deemed to be influenced by several factors such as level of education, level of income and trust in the voluntary savings groups. The purpose of this study was to find out the factors influencing personal savings in groups for economic growth among women in kenya, a case of voluntary savings groups in machakos county. The research objectives of the study was; to find out how income levels influence personal savings of women in groups in machakos county, to find out the influence of level of education on personal savings of women in groups in machakos county, to examine how trust on the voluntary saving groups influence personal savings of women in machakos county and to find out the influence of motivation for future expectations on personal savings of women in groups in machakos county. The study was guided by the life cycle theory which proposes that individual’s changes in resources over time and influenced by education among other factors have an influence on savings. The study might be beneficial to groups on savings as well as policy makers who come up with regulations concerning savings through groups. The study employed the descriptive survey design. The target population was all the 1,482 group members of the various voluntary savings groups in machakos county from which a sample of 148 was obtained. The study established factors that influence personal savings amongst the women in vsgs as level of education, level of income, trust in financial institutions and motivation for future expectations are some of the factors that influenced the savings decisions. Concerning influence of income on personal savings, 68.3% agreed that having other sources of income would increase their ability to save while another 54.7% agreed that their level of income influences their personal savings. In addition, the respondents indicated that (51.9%) those with high incomes are able to save in groups. On educational levels and savings, the findings indicated that (60.5%) level of education influences savings behaviours. Those with high levels of education saved more than those with lower levels. Consequently, the study found out that 50.9% agreed that trust on savings group influences savings on vsgs. Results on motive for future expectations showed that 51.8% agreed that they save to own a home in the future and others for unforeseen contingencies. The study concluded that income levels, education levels, trust and motivation for future expectations played a critical role towards the savings behavior of women. Based on the findings, the study recommends the individuals to seek other sources of revenue be it from farming or selling of clothes just to name but a few other sources of income, groups and individuals to undertake regular financial literacy courses. The study further recommends that for more transparency and honesty in vsgs in order to increase the level of trust among the members.