Determinants of Domestic Savings Mobilization Among the Rural Poor: The contribution of Table Banking in Kenya

Abstract

This study examined the determinants of domestic savings mobilization among the rural poor in Uasin-Gishu county, Kenya. The general notion is that the subsistence farmers are too poor to save. This seems to be unfounded given the fact that they are general excluded from formal financial services and studies on poverty in the country show that the average propensity of the rural households to save is higher than the national average. What are the factors which motivate small scale farmers to save? The study was conducted on 446 table banking groups under the aegis of JOYWO, a table banking grouping in Kenya. Data was collected using structured questionnaires from members of groups under the umbrella of JOYWO. The findings of the study indicates that household income had a positive and significant effect on savings mobilization while dependency ratio had a negative and significant effect on savings mobilization. Household size was not significant. The results point to the need to expose the rural poor to informal savings and financing models expected to enhance income generating capabilities of the rural poor and lower the level dependency through government welfare funding for senior citizens and essential services for the young.