Factors influencing savings among land reform beneficiaries in South Africa

Purpose - The purpose of this paper is to determine the effects of socio-economic factors of land redistribution for agricultural development project beneficiaries on savings in the North West Province, South Africa. Design/methodology/approach - A binary logistic regression model was employed to determine the effects of socio-economic factors of project beneficiaries on their savings. Findings - The results show that the average number of trainings attended by the beneficiaries, the proportion of youth per project and the average net farm income of the project positively and significantly influence the level of savings by the beneficiaries. About 62 percent of the beneficiaries did not have savings; thus, only 38 percent of beneficiaries had savings. Of the 38 percent who had savings, the majority (77 percent) had an annual net farm income of less than R1,000. Only 2 percent of the projects had an annual net farm income of more than R10,000. Research limitations/implications - The findings of this study are valuable to policymakers dealing with the issue of land reform and could shed some light on how land redistribution can achieve its intended purposes. These findings should be granted serious consideration when formulating policies aimed at improving savings within collective groups. Practical implications - The findings of this study have revealed the importance of training and participation of youth in influencing savings. As well, the findings imply that an organization or household with a health income have a higher propensity of saving. Social implications - The research findings point out to the importance of saving. With savings, a household is in a better position to deal with situations that arises in case of emergency. Originality/value - This paper is among the few studies to analyze the determinants of savings at a group or project level. Most studies are done at household or individual level.