The Impact of Financial Institution on House Hold Saving Behavior in Addis Ababa

tit

Table of Contents pages
1. Introduction 1

1.1. Statement of the problem 1

1.2. Objective of the study 2

1.3. Research questions 3

1.4. Scope of the study 3

1.5. Methodology of the study 3

2. Literature review 4

2.1. Conceptual definitions 4

7.2. Theories of Motives of saving 4

7.3. Theoretical relationship between financial institution and saving in Brief 5

7.4. Empirical relationship between financial institution and saving in Brief 6

Reference

1. Introduction

1.1. Statement of the problem

Many sub-Saharan African countries introduced financial sector reforms to improve the performance of the financial sector in general, and financial savings levels in particular, in the 1980s and 1990s. Yet, despite these reforms, for many countries, the expected increase in financial savings levels was short lived.

The financial institution in which the banking sector occupies the largest part is complex in structure and plays a decisive role in the financial and economic stability and growth of a nation. Due to underdevelopment or the non-existence of securities markets in most of developing countries including Ethiopia, banks are the major players and they are the most important financial intermediaries.

Many financial institutions in developing countries offer savings products. Yet, little has been done to assess systematically and quantitatively the relative merits of different instrument designs. Savings is critical to households in developing countries; it allows households to smooth consumption in the face of volatile income and supports investments in human and physical capital. Savings mobilization typically is considered low in developing countries, but creating and implementing policies to raise it is difficult. Low