Savings preference of rural households: empirical evidence from tomato farmers in Ghana

The study examined the choice of mode of savings between formal and informal financial arrangements among tomato farmers. A total of 562 farmers were randomly selected from six districts in three regions: Ashanti, Brong Ahafo and Upper East of Ghana. Descriptive statistics in the form of frequencies and percentages were computed for the preferred mode of savings. Binary logistic regression and Kendall coefficient of concordance were employed to identify factors underlying the choice of mode of saving and reasons for the preferred mode of savings respectively. The results showed that years of education, respondents' total income, gender and amount saved per period significantly influenced farmers' choice of mode of saving. The study established the fact that gender roles and norms play a significant role in the choice of mode of savings. The results of the study revealed that women are more likely to adopt precautionary savings behaviour, hence, their financial surpluses are kept in more illiquid forms of savings in the informal savings mode. The study also revealed that there is direct movement of 'consumers' of financial services across the various sectors, hence, indifference to the use of formal or informal means to save.