IDEAS home Printed from https://ideas.repec.org/p/ags/saea18/266868.html
   My bibliography  Save this paper

Determinants of the choice of a savings option: "The case of African Households"

Author

Listed:
  • Asare, Eris
  • Nakakeeto, Gertrude
  • Segarra, Eduardo

Abstract

Recent research shows that about 2.5 million people have no access to financial services worldwide. The research also shows that Africa, the home to 70 percent of the world’s least developed countries, has 80 percent of its population unbanked. These statistics are particularly disturbing as they have direct implications for economic growth. This is because, financial inclusion, including savings, has been shown to have a positive impact on economic growth and development. However, recent empirical research is limited in explaining the determinants of the choice of the savings option in Africa. By using survey data obtained from the World-Global Financial Inclusion (Global Findex) Database, 2014, we investigate how household’s characteristics affect their choice of a saving option. We use the multinomial probit model due to its ability to account for issues of independence of irrelevant alternatives (IIA). Our results indicate that there is a strong disconnect between female entrepreneurs and the formal banking sector.

Suggested Citation

  • Asare, Eris & Nakakeeto, Gertrude & Segarra, Eduardo, 2018. "Determinants of the choice of a savings option: "The case of African Households"," 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida 266868, Southern Agricultural Economics Association.
    • Handle: RePEc:ags:saea18:266868
    DOI: 10.22004/ag.econ.266868
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/266868/files/Determinants%20of%20the%20choice%20of%20a%20savings%20option%20SAEA%20Paper.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.266868?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Vivien Foster & Cecilia Briceno-Garmendia, 2010. "Africa's Infrastructure : A Time for Transformation [Infrastructures africaines]," World Bank Publications - Books, The World Bank Group, number 2692.
    2. Bruhn, Miriam & Love, Inessa, 2009. "The economic impact of banking the unbanked : evidence from Mexico," Policy Research Working Paper Series 4981, The World Bank.
    3. Thorsten Beck & Samuel Munzele Maimbo & Issa Faye & Thouraya Triki, 2011. "Financing Africa : Through the Crisis and Beyond," World Bank Publications - Books, The World Bank Group, number 2355.
    4. Martin Fishbein, 2008. "A Reasoned Action Approach to Health Promotion," Medical Decision Making, , vol. 28(6), pages 834-844, November.
    5. Beck, T.H.L. & Munzele Maimbo, S. & Faye, I. & Triki, T., 2011. "Financing Africa : Through the crisis and beyond," Other publications TiSEM 334b6bd2-a7a6-47d5-be82-3, Tilburg University, School of Economics and Management.
    6. Mr. Emilio Sacerdoti, 2005. "Access to Bank Credit in Sub-Saharan Africa: Key Issues and Reform Strategies," IMF Working Papers 2005/166, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Franklin Allen & Elena Carletti & Robert Cull & Jun QJ Qian & Lemma Senbet & Patricio Valenzuela, 2021. "Improving Access to Banking: Evidence from Kenya [A matter of experience? Understanding the decline in group lending]," Review of Finance, European Finance Association, vol. 25(2), pages 403-447.
    2. Thorsten Beck & Robert Cull, 2013. "Banking in Africa," CSAE Working Paper Series 2013-16, Centre for the Study of African Economies, University of Oxford.
    3. Ströh de Martínez, Christiane & Feddersen, Marietta & Speicher, Anna, 2016. "Food security in sub-Saharan Africa: a fresh look on agricultural mechanisation. How adapted financial solutions can make a difference," IDOS Studies, German Institute of Development and Sustainability (IDOS), volume 91, number 91, March.
    4. Beck, Thorsten & Demirgüç-Kunt, Asli & Singer, Dorothe, 2013. "Is Small Beautiful? Financial Structure, Size and Access to Finance," World Development, Elsevier, vol. 52(C), pages 19-33.
    5. Atanda Mustapha Saidi, 2017. "Working Paper 273 - Stock (Mis)pricing and investment dynamics in Africa," Working Paper Series 2390, African Development Bank.
    6. Pelletier, Adeline, 2018. "Performance of foreign banks in developing countries: evidence from sub-Saharan African banking markets," LSE Research Online Documents on Economics 86368, London School of Economics and Political Science, LSE Library.
    7. Christian Lambert Nguena, 2019. "Working Paper 323- Mobile Financial and Banking Services Development in Africa," Working Paper Series 2449, African Development Bank.
    8. Sissy, Aisha Mohammed & Amidu, Mohammed & Abor, Joshua Yindenaba, 2017. "The effects of revenue diversification and cross border banking on risk and return of banks in Africa," Research in International Business and Finance, Elsevier, vol. 40(C), pages 1-18.
    9. Oyebola Fatima Etudaiye-Muhtar & Rubi Ahmad & Taiwo Azeez Olaniyi & Bilqees Ayoola Abdulmumin, 2017. "Financial Market Development and Bank Capitalization Ratio," Paradigm, , vol. 21(2), pages 126-138, December.
    10. Abiodun Hafeez Akindipe, . "Public Debt Financial Development in Nigeria," Journal of Economic and Sustainable Growth 2, Office Of The Chief Economist, Development Bank of Nigeria.
    11. Amon Simba & Mahdi Tajeddin & Léo-Paul Dana & Domingo E. Ribeiro Soriano, 2024. "Deconstructing involuntary financial exclusion: a focus on African SMEs," Small Business Economics, Springer, vol. 62(1), pages 285-305, January.
    12. Mutarindwa, Samuel & Schäfer, Dorothea & Stephan, Andreas, 2020. "Legal History, Institutions and Banking System Development in Africa," GLO Discussion Paper Series 444, Global Labor Organization (GLO).
    13. Christian Lambert Nguena & Roger Tsafack Nanfosso, 2013. "What Drives and Limits Financial Deepening Dynamics? Fresh Empirical-based Policy Lessons for African Sub-Regions," AAYE Policy Research Working Paper Series 13_003, Association of African Young Economists, revised Nov 2013.
    14. Emenalo, Chukwunonye O. & Gagliardi, Francesca, 2020. "Is current institutional quality linked to legal origins and disease endowments? Evidence from Africa," Research in International Business and Finance, Elsevier, vol. 52(C).
    15. Nguena Christian Lambert & Tsafack Nanfosso Roger, 2014. "On the Sensitivity of Banking Activity Shocks: Evidence from the CEMAC Sub-region," Economics Bulletin, AccessEcon, vol. 34(1), pages 354-372.
    16. Mutarindwa, Samuel & Schäfer, Dorothea & Stephan, Andreas, 2021. "Differences in African banking systems: causes and consequences," Journal of Institutional Economics, Cambridge University Press, vol. 17(4), pages 561-581, August.
    17. Mutarindwa, Samuel & Schäfer, Dorothea & Stephan, Andreas, 2020. "Central banks' supervisory guidance on corporate governance and bank stability: Evidence from African countries," Emerging Markets Review, Elsevier, vol. 43(C).
    18. Rubi Ahmad & Oyebola Fatima Etudaiye-Muhtar & Bolaji Tunde Matemilola & Amin Noordin Bany-Ariffin, 2016. "Financial market development, global financial crisis and economic growth: evidence from developing nations," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 15(3), pages 199-214, December.
    19. Eugene Iheanacho, 2016. "The Impact of Financial Development on Economic Growth in Nigeria: An ARDL Analysis," Economies, MDPI, vol. 4(4), pages 1-12, November.

    More about this item

    Keywords

    Agricultural Finance;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:saea18:266868. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/saeaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.