Abstract:
One of the most predictable elements influencing both personal and economic development is
saving. It is a strategic variable in achieving financial security and growth that influences both
personal and societal well-being. However, there are few empirical studies on the factors that
affect the saving performance of households headed by women in Ethiopia, and the level of
saving is low. This study was started with the intention of discovering the key factors that affect
how well women-headed households in Gondar town save money. Cross-sectional data were
used for the study's purposes. The data was gathered from 411 sample households via interviews
and structured questionnaire. The study used censored Tobit economic regression model
approaches to examine the link between savings by women household heads and independent
factors on both a qualitative and quantitative level. The analysis's descriptive approach reveals
that, among all respondents, 230 (62%) have saved from their disposable income, compared to
141 (38%) women household heads who had no saving experience. Low level of income, low
level of financial knowledge and upland expenditure with constant source of income is some of
the major factors that prevent women head households from saving money. When compared to
those who are self-employed, women headed households who work in the public sector, the
private sector, or as laborers generally perform less saving performance. Other factors such as
house ownership, financial literacy, incentives, and income can significantly and positively
influence the probability to save of women household heads whereas family size is negatively
and significantly affect women household heads saving. Therefore, financial institutions,
particularly banks, governments, academicians, and policy makers should take their
responsibility to encourage women-headed households to save, which will reflect by increasing
household income, providing incentives, using financial planning for consumption and
expenditure, giving an opportunity for housing status of households, decreasing family sizes, and
stabilizing the price of goods and services. Especially the government should consider salaries of
government and private sector employees as well as minimum labor wage to be compatible with
current inflation.
