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Household Saving Behavior: The case of rural industry in Bantul

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  • Aloysius Gunadi Brata

    (University of Atma Jaya Yogyakarta)

Abstract

In generally rural industries self financed their activities. by their holder’s own capital. In the situation where other financial sources were limited, the own capital is very important for rural industries. The question is what are the sources of this capital? We are talking about household saving, now. In the relation with the development of rural industries there is a need to explore the behavior of this kind of saving in order to increase the role of rural financial institutions. Based on a case study at a sub-district in Yogyakarta, I found that rural industry households have sufficiently ability to save. They were also save in financial assets, beside real assets. However it also important to underlined that these saving more in the non-bank financial institution than in the banking institution, included the Village Units of Bank Rakyat Indonesia (BRI). This situation could be indicated that banking institution just gives little attention on the rural households saving ability. Since saving ability could be argue as a repayment ability indicator, this finding also explained why there were very limited rural industries that got credit from banking institution. Using an econometric model of life-cycle theory, this study also found that household saving was determined by household’s income, both of education level and sex of the industry holders, and the varieties of industries. This mean that in order to solve the lack capital problem in rural industries we also have to consider those variables, especially the education and the varieties of industries.

Suggested Citation

  • Aloysius Gunadi Brata, 2004. "Household Saving Behavior: The case of rural industry in Bantul," Finance 0410006, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpfi:0410006
    Note: Type of Document - pdf; pages: 7
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/fin/papers/0410/0410006.pdf
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    References listed on IDEAS

    as
    1. Shumaker, Linda D & Clark, Robert L, 1992. "Population Dependency Rates and Savings Rates: Stability of Estimates," Economic Development and Cultural Change, University of Chicago Press, vol. 40(2), pages 319-332, January.
    2. Anand Chandavarkar, 1993. "Saving Behaviour in the Asian‐Pacific Region," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 7(1), pages 9-27, May.
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    Cited by:

    1. Shaibu Baanni Azumah & William Adzawla & Augustine Logoti Tiweh, 2015. "Analysing the effect of microenterprise development on rural households` savings in the Tolon district of Ghana: A switching regression approach," Journal of Asian Business Strategy, Asian Economic and Social Society, vol. 5(6), pages 99-108, June.
    2. Yazeed Abdul Mumin & Abubakari Razak & Paul Bata Domanban, 2013. "Analysis of Household Heads? Decision-To-Save with Financial Institutions in Ghana," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(11), pages 1466-1478, November.
    3. Ismail, Aisha & Rashid, Kashif, 2013. "Determinants of household saving: Cointegrated evidence from Pakistan (1975–2011)," Economic Modelling, Elsevier, vol. 32(C), pages 524-531.
    4. Naeem AKRAM & Muhammad Irfan AKRAM, 2015. "Savings Behaviour In Muslim And Non-Muslim Countries In Context To The Interest Rate," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 25(2), pages 161-177.
    5. Tasnim Khan & Abid Rashid Gill & Sobia Haneef, 2013. "Determinants of Private Saving: A Case of Pakistan," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 1(1), pages 1-7, December.

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    More about this item

    Keywords

    saving; rural industry; Indonesia;
    All these keywords.

    JEL classification:

    • G - Financial Economics

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