Households’ saving pattern and behaviour in East Africa

This paper aims at examining the influence of households’ demographic characteristics on their savings behavior in the East African region. The findings show that nearly people of all gender and age category in East Africa practice life cycle model of savings behavior. It is concluded from the analysis that the preference of savings motive differs from one country to another. However, it is shown that education is highly ranked in all countries as the most preferred savings motive with old-age savings motive ranking the least. Furthermore, the results from cross-tabulation reveal that male-headed households save more often for business purpose than their counterparts female-headed households, in almost all countries; younger head of households save more frequently for business purpose than older ones; and those heads of households with higher income save less frequently for business purpose compared to households whose heads have lower income. Overall, it is concluded that the households’ savings are mostly used for precautionary motives. This implies inadequate social schemes and insurance services in the region. Subsequently, the governments of the East African region are encouraged to improve the health and insurance systems of their respective countries to enhance the income status and lives of their citizens.