An investigation into the determinants, problems and consequences of low savings in developing countries: A case study on Ghana
Date
2012-05
item.page.datecreated
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
Sub-Saharan African(SSA) countries, havehistoricallyrecorded low levels of savings.
These countries have also experiencedthe lowesteconomic growth rates around the
world. Economists such as Solowidentified a strong positive link between savings and
economic growth:Countries that save more grow fastest. Ghana, like other SSA
countries isfaced with this problem: levels of savings in Ghana are low with a bulk of
savers being educated and from the formal sector of the economy. However the
economy of Ghana is made up of mostlyindividuals in the informal sector, which
holds about 85% of the total workforce. It is therefore a major concern since most
Ghanaians that fall in the informal sector of the economy have low savings
habits.This study therefore sought to identify the determinants of savings for
individuals in both the formal and informal sector of the economy.The study was
conducted separately in Accra (with easy access to formal banking services) and
Berekuso (with little access to formal banking services). The research employed
mainly qualitative analysis in the form of questionnaires, interviews and a focus
group of experts. The research concluded that individuals in Berekuso did not save
because of extremely low monthly incomes. Individuals in Accra however claimed
that even though they did save they were not motivated to save because interest on
savings was quite low although.The research results imply that the government
should step up efforts to reduce interest rate spread for example through the
enactment of antitrust laws which foster competition. The government should also
engage in pro poor policies that generate jobs for rural dwellers and raise their
incomes in order to help increase savings among Ghanaians.
Description
Thesis submitted to the Department of Business Administration, Ashesi University College, in partial fulfillment of Bachelor of Science degree in Business Administration, May 2012
item.page.type
Thesis
item.page.format
Keywords
Ghana, savings, developing countries, banking