Determinants of Savings and Capital Formation among Rural Farmers in Isoko North Local Government Area of Delta State, Nigeria

This study examined the determinants of savings and capital accumulation in Isoko north local government area of Delta state, Nigeria. It specifically sought to identify the socioeconomic/demographic variables of the rural dwellers that affect their savings and capital accumulation. It also examined the strategies and motives for saving and the various constraints to savings and capital accumulation in the study area. A total of 150 households were randomly sampled from seven communities out of the 13 that make up the local government area. Data for the study were collected using structured questionnaire and analysed through the use of descriptive statistics such as means, percentages and frequency distribution as well as inferential statistics such as multiple regression analysis. Results from findings revealed that volume of savings is based on the rural farmers’ farm income, nonfarm income, years of experience in a saving programme, age of the farmers and the distance to formal financial institution. The result also showed that majority of the rural farmers save or accumulate capital in non-monetary form as a strategy of saving and are motivated to save in order to increase production. The main constraints to accumulation of savings were low productivity and lack of access to financial credit. It is therefore the recommendation of the study that to further improve on rural farmers savings in the study area, the government should make credit available by empowering formal and informal financial institutions activities in rural areas.